Based on our latest Mercer | Sirota norms, over half (54%) of senior leaders in the tech industry intend to leave their organization within the next three years. That’s a startlingly high percentage, particularly in light of the fact that just 14% of non-tech leaders say they plan to leave within the same time period. Considering the disruptive consequences of turnover—especially at the leadership level—this raises two critical questions:
- Why are so many tech companies facing issues with employee retention, specifically leadership retention?
- What can tech companies do to reduce turnover?
At the core of any turnover decision are two basic dynamics. Employees are either pulled away from their organization by a more compelling offer. Or they are pushed away because their current organization is not meeting their critical needs. Pull factors are hard to control, especially in Silicon Valley and other tech geographies where the war for talent causes companies to come up with more compelling value propositions on a regular basis. But push factors—those aspects of the organizational environment that lead to frustration and disappointment—are controllable.
Based on our research, we’ve found that four fundamental push factors cause employees to leave. Some feel stagnant, stuck in a job that isn’t helping them grow. Others feel disconnected, either from their boss, their direct reports, or their colleagues. Some feel they lack the support they need to get their job done. Others have become disenchanted and no longer believe in their company’s mission, strategy, or future direction.
When we look at our normative data, comparing high tech leaders with their non-tech peers, on marker items that measure these four factors, three notable findings emerge.
- Tech leaders feel connected to their colleagues—as evidenced by strong teamwork and collaboration scores—and optimistic about the future of their company.
- But tech leaders are experiencing significantly higher levels of career stagnation, as seen in markedly lower levels of adequate job training and performance feedback.
- And they feel a critical lack of support, as evidenced by a limited access to necessary resources and a struggle to maintain a healthy balance between work and personal life. In fact, attitudinal ratings on work-life balance items trail significantly behind leaders in non-tech sectors. While non-tech leaders also struggle to maintain balance, our norms show that tech leaders are much more likely to experience work-life strain and stress.
Considered together, these data suggest that a number of tech leaders are being pushed out of their organization by murky career paths, limited resources, and unmanageable work-life demands.
So what can be done to increase commitment? Based on our research we’ve identified three ways to reduce turnover among the upper ranks. The first step is to collect data to understand turnover patterns, flight risks for specific populations, and specific drivers of turnover for your organization. This will clarify your turnover situation. The second step is to address specific concerns uncovered during the initial discovery phase. For example, if a lack of performance feedback is pushing your leaders out, then focus on creating an environment that supports consistent feedback and be sure to hold leaders accountable for development. The third step is to build barriers to exiting by ensuring leaders are able to progress in their career development, stay connected to their organization and colleagues, receive resources required to get their job done, and find meaning in the company’s direction and purpose. By addressing the four common pathways to turnover (i.e., stagnation, feeling disconnected, lack of support, and disenchantment), you can foster a culture where your employees and leaders alike are working harder and staying longer.
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