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Talent in tech: 3 challenges facing today’s HR leaders

The old adage “work is not your life” is becoming harder and harder to prove—because most of us can no longer leave our work at work.

This is perhaps more true at tech companies than anywhere else. With our increasing reliance on technology and the innovation borne of the companies that make it, keeping the tech workforce happy and engaged is becoming a uniquely nuanced challenge.

With fierce competition for the best and the brightest, it’s more important than ever for companies to invest in creating vibrant cultures that attract and retain top tech talent—focusing not just on the product being created, but on the people behind the technology.

In part one of this series, we’ll take a look at the obstacles tech companies face when it comes to culture. And later in part two, we’ll talk about how great company culture is made.

First, what is company culture anyway?

Gallup defines culture as “. . . a critical part of an organization’s identity . . . created through the experiences that employees have with the corporation and, just as importantly, with each other—the everyday interactions with peers, managers, and executives.”

It’s the collective experience your employees have each day when they come to work—and the feeling they carry with them when they log off and go home at the end of the day. It’s what they feel when they engage with company leaders, the messages and behaviors that are reinforced by their managers, and how they collaborate and socialize with their peers.


CHALLENGE 1: Attrition is expensive

According to Josh Bersin of Deloitte, the average cost of an employee leaving a job is 1.5–2.0x that of their annual salary (and that’s a conservative estimate). Case in point: you’re a large company that brings on lots of entry level employees in “hiring classes” with salaries of roughly $30K a head, but then the majority of them decide to leave a year later. Each of those employees would end up “costing” you about $60K over the course of that short year—not to mention hundreds of hours lost to training and onboarding activities. The more experienced an employee, the more expensive they are to replace.

Using a model she calls ELTV (Employee Lifetime Value), Maia Josebachvili conservatively estimates that the value of retaining an employee for three years instead of two can yield an additional $1.3MM in revenue earned over that same period. Josebachvili suggests that making small improvements to your culture and business practices can have a huge impact down the line—through developing more efficient and comprehensive onboarding practices, prioritizing management and professional development, and creating clear pathways for advancement.

There are steep hidden costs of attrition too. When your workforce drastically shifts and you lose seasoned talent, your ability to remain at peak productivity dwindles. The morale of the people left in your organization declines as they see their peers head off to presumably greener pastures. The skills, best practices, systems, and institutional knowledge those people used to do their jobs leave with them. And that leaves company leaders scrambling to reassign responsibilities and figure out who might be equipped to pick up where that employee left off—another hefty investment in time and resources.


CHALLENGE 2: Talented people can work anywhere

The tech industry has one of the lowest employee retention rates around. Tech talent is in high (and growing) demand. The transferability of tech experience across the world’s leading companies means that entire workforces are now able to pick up their sought-after skills and take them elsewhere—likely to a competitor with a slightly better value proposition.

For people looking to create fulfilling and sustainable careers in tech, choosing an employer comes down to more than ping-pong tables, nap pods, snack stations, or beer kegs. Any employer can provide those things (and they all are, in an effort to keep their employees around longer). For most, choosing a company to work for even comes down to more than pay and benefits packages—because what well-funded tech company isn’t boasting competitive salaries and 401K matching these days? It’s all table stakes in the competitive world of tech.

In short: Top tech talent has the pick of the lot. They can find work anywhere.


CHALLENGE 3: Talented people want to give meaning to their work

Particularly among Millennials, who currently make up the largest generation in the US workforce, there is a strong call for careers that combine money-earning power with meaning. Tech companies need to answer that call. Millennials want to be able to see themselves in the outcomes of their day-to-day efforts—they want to feel that they are making a difference in the world around them. Today’s workforce no longer sees profit and purpose as mutually exclusive. They want—and feel they deserve—both.

Tech companies that can tell a clear story about the impact their work has on society are likely to have an easier time creating meaning around why they exist—and why current and prospective employees should want to be a part of it. Because when employees can map their hard work to real-life outcomes, they feel fulfilled and valued.

When it comes to attracting and retaining top talent, every detail counts.

Even if the daily tasks of an individual employee seem dry or routine on the surface, if their efforts can be aligned to a greater good, they are more likely to develop loyalty to their company and its cause. It’s in the company’s best interest to make this story abundantly clear, authentic, and intrinsic to everyday company life.

The bottom line: Top tech talent needs more than money to get them excited to go to work every day. They want to know that their efforts can create a real impact out in the real world.

Other cultural challenges confronting tech companies



According to Forbes, men currently hold over 75% of tech jobs in a workforce that’s 95% white. But more and more organizations are realizing that in order to succeed, they must foster cultures of diversity and acceptance. They need to attract a wide variety of perspectives and worldviews to speak more emphatically to a global audience.


Work-life balance

Many employers expect their employees to be reachable in their off-hours—if even only for emergency or crisis situations. For tech companies, this problem is compounded. When the tools used for work go home with the employees, it becomes hard not to rationalize responding to those Slack messages after-hours or fixing that bug before morning.

The tech startup world is also infamously prone to the “workaholic” way of life. If company leaders normalize working into the wee hours of the morning, their employees might naturally assume that those behaviors are just part of the company’s culture. A poorly weighted work-life balance doesn’t increase productivity—it sets employees up for burnout.


Balancing change and transparency

Tech companies move fast. And when the stakes are high and the competition is cutthroat, transparency can easily get thrown to the wind in lieu of speed. Tech companies must walk a fine line between operating with transparency (without divulging competitive information) and thoughtfully navigating change (while still being timely and responsive).

Parting thoughts

At New Kind, we believe culture is created every day, by everyone within your organization. It’s a living, breathing part of your company that takes diligence and care to sustain.

When it comes to attracting and retaining top talent, every detail counts. And for tech companies with ambitious goals, having a strategy in place around culture that supports hiring and growth is key. In part two of our blog series on tech company culture, we’ll cover some tactics employers can use to cultivate cultures that align with their values, and which can help attract—and retain—top talent.

Want to be the first to know about part two in this series and all the other Insights we publish? Sign up for our mailing list and follow us on social media.

And as always, if you’ve got questions or want to talk about telling your organization’s employer story, drop us a line. We know a thing or two about helping tech companies navigate the worlds of brand and culture.

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