Why Tech Industry Turnover Is on the Rise

2 min read
Nov 26, 2016

tech turnover

A US Department of Labor report shows that the tech industry has experienced higher turnover every year since 2012. Our research had similar findings, with tech workers reporting that they were less likely to stay with their organizations for another year than workers in other industries.

Turnover is a top-of-mind concern because of its high financial and productivity costs. The Society for Human Resource Management found that replacing an employee costs 90 to 200% of the employee’s annual income. In the constantly evolving tech industry, in which specific knowledge is crucial, this cost could be even higher.


The Root Causes of the Problem

That the tech industry is having retention issues may be a bit of a surprise. After all, companies like Google, Amazon, and Apple have all grabbed headlines for offering employees generous benefits packages.

But part of the reason they feel the need to set up nap pods and stock the fridges with craft beer is because they know that their talented employees are liable to jump ship. Tech workers with unique skills are in high demand, and therefore, they’re likely to be recruited by employers that are offering stronger compensation. In an industry that demands workers stay up-to-date or become obsolete, tech workers savvily negotiate the labor market to find jobs at the most innovative companies.

So part of the issue is structural. However, the tech industry has fallen behind in some areas. For example, TINYpulse’s 2016 Tech Industry Report, a survey of more than 8,000 employees, discovered that they feel like they’re not getting enough professional support. Tech industry workers report fewer mentorships and opportunities for development than workers in other industries.

tech industry


Now Compared to 2015

One disturbing aspect of our study was that in many areas, tech workers reported less satisfaction than they did a year earlier. For example, they reported that their companies are less responsive to feedback than they were a year ago. One issue may be that while companies solicit feedback, they don’t incorporate that feedback effectively. Employees don’t just want to tell management what they think; they want solutions to real workplace problems.

The report also saw a drop in the number of tech employees who think that their company is better now than it was six months ago. This is a surprising finding for a high-growth industry. Tech employees also feel like there’s a disconnect between their companies and customers.

But There Is Good News . . .

In several areas, the tech industry is outpacing other industries. Tech workers reported high levels of satisfaction with transparency, saying that management is sharing more information than ever before. They’re also praised more frequently than other workers. This is key, as consistent praise is positively correlated with retention.   

Many experts say that the tech is always going to have a “high-churn rate.” Tech companies have already made changes in an effort to lower turnover and improve satisfaction. But they still have a ways to go in professional development and incorporating feedback.



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