In our previous UTOPIC0DE’s post, we introduced why companies need to motivate their tech teams to solve one of the main problems in the tech industry: staff turnover. In this post, you’ll discover with more detail how team leaders motivate their tech teams, what are the most common causes of staff turnover and strategies to reduce it, and what are the best ways to develop employees.
We’ve asked Maya Dadoo, CEO and Co-founder of Worky, Melina Cruz, CEO and Co-founder of Homely, and Andrés Martínez, Head of Talent Management and Culture at Bitso, to join us for a rich roundtable discussion on the relationship between motivation and job retention. You can find the full questions and answers below.
Employee engagement and turnover in the tech industry
Staff turnover is the number of employees that leave your company and need replacing in a set amount of time.
- The tech industry has the highest turnover of any industry, averaging 13%.
- The median tenure can be as little as one year.
- For each employee lost, the cost to the company could be up to 150% of the annual salary.
But what do companies and developers think about high turnover in the tech industry? We surveyed 100 companies and 100 developers, and here are the results.
CTOs believe the main reasons for employee turnover are:
- Employees didn’t feel comfortable with the team.
- Compensation.
- Lack of growth within the company.
Developers told us they changed their job because:
- They didn’t see a clear growth path.
- The job was not challenging anymore.
- Compensation.
How to motivate your tech team
Motivation is the force that drives people to perform certain actions and persist in them.
What are the most effective employee motivation strategies?
According to Maya Dadoo, developers are motivated by different needs and desires. For example, someone may want to learn a new programming language. Make sure their needs fit with your company’s mission and business objectives.
During the interview process, you should focus on what motivates developers and what are their objectives and expectations. Is it compensation? Impact? Innovation? Once you know what they are looking for, you can start thinking about motivation strategies.
Motivation strategies involve communication and building a strong feedback culture.
“If you want to grow, you need to have feedback from yourself, your team members, and your boss. You want to know if what you’re doing is having an impact,” says Maya. “So tell your devs what you value about their contributions, make them feel appreciated and part of the process.”
And what are the most common motivating factors for developers?
“Disruption. Innovation. Impact. That’s what dev teams need the most,” Andrés Martínez explains. “Coders are proud to say that they have been part of an amazing project.”
Other major motivating factors are company culture and continuous learning. At Homely, employees love the company and its mission, and this gives meaning to their job. Besides, teams think that self-learning is extremely important. That is why they organize sessions where team members learn from one another and share good practices on how to code.
What about compensation?
“In terms of salary, each position has a salary range based on its market reference point. However, if we think about perks, we must then include training, development, challenge, and transparency,” explains Andrés. “Your devs need a challenge. Because if they’re not growing at your company, they may look for a new job.”
Cultural fit and employee loyalty. These two concepts are closely related. Indeed, if your workplace culture encourages employees to have their voices heard and makes them feel valued, this will create loyalty, and they’ll be less likely to resign. But how can you achieve this?
You can build a unique, positive culture and increase employee loyalty by following these simple steps:
- Clearly define your culture. What are your company values, mission, and vision? How do you work? What are your expectations about employee behaviors?
- Hire a candidate who aligns with your mission, goals, and team.
- Be clear with employees from day one, and prove that what you say is true.
Now that remote work is the new normal, how can you grow a positive company culture with a remote team?
“At Homely, it was the dev team that showed us how to run a company remotely,” says Melina Cruz. “Devs knew how to organize work and why it was important to have daily or weekly meetings to check in with each team member’s progress. Remotely, they performed way better than other teams and shared with us how they live that culture.”
“They taught us the importance of assertive communication between team members. They told us what they do to reduce stress in the workplace, especially when there is a problem, and they might end up working 10 hours a day just to realize that there was a two-character error! But also that they organize team sessions to relax, have a chat and play League of Legends.”
“Hiring during the coronavirus pandemic: that’s when you test your company culture,” Maya explains. “You need to learn how to shift from face-to-face communication to virtual communication.”
“Now, at Worky, we have six open positions, and we are hiring remotely. In the first two weeks of onboarding, we highlight our company culture, we are transparent, and we have a clear and structured onboarding process. We aim to make sure new hires become part of our culture.”
Also, Andrés believes that culture evolves. Particularly in this time of remote work, you should:
- Be clear about how the company works — what are the tasks, deadlines, and priorities.
- Listen to your employee’s feedback and implement changes accordingly, as employees are the people who make companies work.
Causes of staff turnover
Can you avoid staff turnover? Are there any strategies to reduce it?
According to Andrés, turnover can and has to be avoided. To do so, you need to know your culture — mission, values, goals — and what your employees need. How can you make them grow? How to make them feel valued?
For example, Bitso has a low turnover rate because they listen to their employees, motivate them, and keep them enthusiastic.
It’s also important to remember that, sometimes, employees can leave because that would be the next natural step in their career path. However, if they leave your company because they don’t feel comfortable with the team, the manager, or the company culture, you need to change.
But how can managers get close to their employees?
First, there should always be a feedback session with the manager. Second, you can use different tools, such as Slack, to bring your team closer. Use these tools to ask your employees how they feel. Send them a message.
If you are a CTO, you should always know how team members are feeling. Indeed, if in a startup environment something doesn’t work, it means that someone is not working at their best. It is normal to have ups and downs but make sure you are aware of them.
So, how to reduce turnover? By feeling that we are part of something that works. If I talk, they listen. If I fall, we get up together. If something breaks, we fix it together.
The strategic role of HR
While, in startups, CEOs have a great responsibility in terms of HR, this is not the case in large companies where there is a designated HR manager.
At Worky, Melina has noticed that, on average, companies don’t hire an HR manager until they reach 30 people. That’s a lot of employees to manage, and first-time managers don’t know how to be a leader. But how can you teach them how to be a leader and how to listen to employees?
HR managers, CEOs, and founders have to create space for their teams’ feedback. They need to ensure that communication flow is smooth and efficient.
As the founder of Worky, here’s what Melina does:
- She has a one to one meeting with her employees once a month.
- She presents the company vision statement once a month.
- She interviews candidates for the final decision.
- She asks employees how they feel if they like the company’s products if there’s something they would like to change.
How can you manage stress and avoid work burnout during the coronavirus pandemic?
As Worky is an HR Software, Maya has seen that the pandemic caused a huge drop in the number of people going on vacation. From April to July, no one went on vacation. Teams are stressed, and they don’t know when things will get better. What’s the solution? To have clarity of mind and take a break from work.
In the last few months, many of us have been living, working, cooking in the same place. The division between these activities is not that clear anymore, and it’s too easy to get caught up in work.
To solve this problem, Homely has introduced this special rule: each employee takes a day off, usually a Friday, every two weeks. In addition to this, Melina organizes daily meetings with her teams to make sure everyone feels good physically and mentally. Then, after a busy day, team members can relax and have fun together drinking a beer, playing remote games, or watching a movie.
Now that everyone is working from home, these ideas are turning out to be very helpful. Having a meeting where employees can just have a beer or have a chat together helps them realize that the day is over, that it’s time to relax. And whenever they feel stressed, they can also use this time to talk about it.
What can you do when a third-party offer a higher compensation?
According to Maya, when you make an offer, you should remember that there is always a salary range for a particular position. But then, it’s also important to consider what you’re offering in terms of flexibility, vacation, culture, and personal development.
When Andrés joined Bitso, the company had 17 people and needed to hire more engineers. But, as Bitso uses a high level of technology, it was hard to find candidates who were familiar with that technology. So, they figured out a winning strategy to attract new talents was offering them the opportunity to grow with the company.
Employee development
What are the main strategies to improve employee development at your company?
“When you interview candidates and make them an offer, you know what their skills are and what they can improve. As a company, you can help workers to constantly learn what’s new, and develop their skills further,” Maya says.
“For example, at Worky, we hire developers with different levels of seniority. And for some of them, it’s their first job,” she continues. “At the beginning, we need to be more patient, but we can train them according to our standards and company values.”
From there on, CEOs need to:
- Give feedback to employees and communicate what’s working well and what is not.
- Create career opportunities for employees. Let’s say the team is growing: what role will they take in the company?
You need to motivate and develop all team members but in different ways. Indeed, training should always meet each employee’s needs and development path. CTOs need to know what are the goals of each team, and each team member, and what tools they need to grow and solve problems.
Now that remote work has become the norm, how can you give constructive feedback? And how can you establish a successful mentoring program?
First of all, according to Andrés, there are three different kinds of people:
Docile people: whatever you say, they’ll agree to it.
Obstinate people: they don’t accept feedback.
Analytical people: they critically examine an issue and come up with a solution.
The purpose of feedback is to help employees and teams convey the appropriate behaviors, allowing them to perform at their best and achieve goals. If your goal is clear, then all these different kinds of employees will better understand why you are giving them that feedback. So, next time try to say: “If we want to achieve this goal, I think it’s better to do like that.”
A mentor is someone who cares about your professional progression. A mentor is someone who provides you with the tools, guidance, experience, and feedback you need to thrive in your career.
Speaking of compensation, what benefits do your employees like to receive?
Here are some benefits at Homely:
- A vast network of mentors, with top leaders and experts in the tech industry, both at the national and international levels.
- The opportunity to work from home (even before COVID!).
- Flexibility and a result-based approach.
- Continuous learning.
- Recognition of employees' job performance.
“We also organize special meetings to acknowledge the hard work of our employees or teams,” says Melina. “For example, we have one-to-one sessions with each employee. Or, if a team has achieved a great result, such as working non-stop to solve a particular problem, we organize a company meeting.”
At UTOPIC0DE, we all know how staff turnover is affecting the tech industry. That is why we have decided to publish this article and share with you the best practices for motivating your tech team and reducing the turnover rate. We hope these insights from experienced team leaders will help you improve your employee engagement and their development within the company.
If you want to learn more about this topic, you can watch here the full webinar. Join our guest speakers Maya Dadoo, CEO and Co-founder of Worky, Melina Cruz, CEO and Co-founder of Homely, and Andrés Martínez, Head of Talent Management and Culture at Bitso, and start motivating your tech team right away.
