How does a company retain talent?

Enrique Dans
Mar 13, 2016 · 3 min read

You’ll have read by now that Twitter has decided to start paying large cash bonuses to some of its employees in a bid to hold on to them at a time when the company is seen to be in difficulties.

Using these kind of economic incentives to hold on to talent could be relatively short-term measures, or part of a strategy to raise the cost of a possible takeover. Over the course of the last decade, Twitter has made plenty of acquisitions itself, usually along the lines of acqui-hires, aimed at getting hold of talent that otherwise would prove tricky. The thinking behind such strategies is to hold on to talent: it makes no sense buying a company only to see its founders, now multi-millionaires, abandon their project and move on to new pastures.

But for the moment, Twitter’s approach seems to be more to do with convincing employees that it’s a company with a future, a company that has plenty of interesting ideas and a place where there is much to be learned, rather than simply an outfit that just pays well.

Everybody likes to be paid for his or her skills. That said, engineering and development talent tends to stick around when they feel part of a good team, or working with people they admire or can learn something from: meritocracy is intrinsic to a profession that sees how people’s CVs are built on what they can show in open repositories such as GitHub, and to projects that either present a challenge or are interesting in themselves.

Development talent is generally considered less “mercenary” than management talent: factors such as the team, the attractiveness of the project or the opportunity to learn seem to play a larger role in talent attraction and retention. That said, it’s also true that the days of idealism are long gone and that there are plenty of developers in Silicon Valley who even have managers, as though they were movie stars, and who negotiate offers on the basis of increasingly imaginative and varied incentives.

To see Twitter have to resort to offering people money to stick around is, to say the least, worrying: we’re not talking here about a company with cash to burn. This is a place whose development is highly leveraged and that still has a long way to go to prove its business model. If it’s costing you more than the competition to retain talent, then that means that there are fewer incentives to stay, which is never good news. But the alternative of just watching as your talent walks out of the door as developers head off in search of projects with greater potential isn’t much of an option either, which may well have prompted Jack Dorsey to reach for his wallet.

The idea of the developer who sacrifices time and money for a project he or she believes seems less credible when the share price has fallen below the initial flotation price. Hard times ahead…


(En español, aquí)

Enrique Dans

On the effects of technology innovation on people…

Enrique Dans

Written by

Professor of Innovation at IE Business School and blogger at enriquedans.com

Enrique Dans

On the effects of technology innovation on people, companies and society (writing in Spanish at enriquedans.com since 2003)

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