The framework and conditions of IT recruiting in Eastern Europe
In the first part of the article, we considered the key factors affecting IT recruitment companies and the problems of hiring and retaining the loyalty of IT specialists. However, there are still a number of issues regarding an effective strategy for personnel management and decision-making on hiring and dismissing employees, including the need for comprehensive analytics of ongoing processes. We have discussed these issues with Andersen’s leading HR specialists.
Is there high employee turnover in companies belonging to the IT market?
Hiring and dismissing employees are common processes for any company. However, they can often be caused by reasons that are not entirely dependent on or controlled by the company. According to a survey by Career Builder, 74% of employers admit that they often hire unsuitable candidates, which then becomes the reason for their prompt dismissal.
The issue of the correct personnel selection by determining their necessary competencies and qualities at the pre-hiring stage is one of the main challenges that HR professionals face today. According to Global Knowledge’s report for 2020, if the IT industry workers are dissatisfied or demotivated by something, 90% of them start looking for a new job. Considering the heightened competition for qualified specialists in the industry, the turnover can be much higher than acceptable.
According to Elena Kanatko, a senior HR specialist of Andersen’s Minsk office with 6 years of experience in the IT field, staff turnover in IT outsourcing companies, according to unofficial data, is slightly higher than in product firms. This is driven by the specifics of product companies, their pace, and the nature of their work. They only hire beginners on rare occasions, while outsourcing companies are ready to provide a starting point, taking certain risks. As shown by the Analytical Survey of the IT Market 2020, carried out by the consulting company Personal Invest, over the past three years, the staff turnover rate has been fluctuating between 23-26%.
Infographics 1: Staff turnover indicators in IT companies for 2018-2020 according to Personal Invest
Most companies make minimizing this turnover rate a priority for their HR departments. The numbers differ for medium-sized and large companies, as well as small startups, and determine the relative indicator of the steadiness of the core workforce. While agreeing with the above, Teona Daushvili emphasizes that this indicator can be largely influenced by regional specifics, the general culture of employees from different countries, and the peculiarities of preserving their loyalty.
How is employee motivation research carried out and is there a need to accumulate statistics for better personnel management in IT?
In Elena Kanatko’s opinion, the main approach to assessing the state of the company’s employees is holding quarterly interviews with HR specialists. They reveal the psychological state of employees and whether there are significant problems or difficulties in communicating with other employees or performing the assigned tasks. Such information is accumulated by the relevant employees of the HR department and can be provided in the form of a report at the request of the company’s managers.
Along with that, HR specialists can independently go to management to discuss an employee’s future and their usefulness for the company. Equally, measures can be taken if there are concerns about the psychological state of the employee or their intention to leave the company.
The reports help to form a general perception of the situation, but a full understanding of the processes can’t be achieved in this way, adds Teona Daushvili. Comprehensive research on employee motivation and engagement is also beneficial. It is recommended to carry out such research at least once a year and even more often in order to notice a change promptly.
These reports are costly both in implementation and subsequent analytics, so not all companies can afford them. At the same time, according to Deloitte’s study, about 71% of executives consider employee data analytics a top priority for their organizations.
What are the main reasons for the resignation or dismissal of company employees?
On the part of IT outsourcing companies, the main reasons for dismissing an employee are their low productivity and the absence of projects suitable for the employee’s qualification explains Teona Daushvili. The level of proficiency in a foreign language often becomes a stumbling rock. According to Personal Invest’s analytical report for the IT outsourcing market in Eastern Europe, the first reason dominates and accounts for almost 70% of cases. To a lesser extent, grounds for dismissal may be a violation of corporate culture or inconsistency with the company’s policy. In 2020, the percentage of all other cases as reasons for dismissing employees significantly decreased.
The main reason for resignation remains a competitive offer from another player in the market. Teona Daushvili notes that, in this regard, Andersen’s advantages are employee career planning, the possibility of continuous training, and frequent revision of their qualifications and salaries. Bonuses and benefits are less significant factors as they are often taken for granted.
According to Personal Invest’s report, in 2020, the top 3 reasons for resignation included:
- dissatisfaction with the rate of earnings (29%),
- loss of interest in the project (24%),
- low degree of satisfaction with the company (15%).
Last year’s indicators are far different from those of previous years – there is a decrease by three to five times for such reasons as a lack of opportunities for professional and career growth, relocation, and personal circumstances, which greatly distorts the general trend.
Infographic 2: Reasons for the voluntary resignation of IT specialists according to Personal Invest
If we compare the situation with the global perspective, then, according to Global Knowledge’s report, the number one reason for employees leaving the IT sector is dissatisfaction with career opportunities. Two-thirds of specialists cited the desire to ensure better growth and development opportunities as the main reason for handing in their notice. About half of the respondents were going to start looking for a new job due to the lack of career prospects. More than 62% of specialists changed their jobs due to their employer’s unwillingness to invest in their development and training.
When managing personnel in IT outsourcing companies in Eastern Europe, the main focus should be on reducing staff turnover and conducting a comprehensive analysis of employee motivation and loyalty data. Taking into account the main reasons for the resignation of IT companies’ employees, it is possible to develop successful strategies for improving the quality of personnel and retaining them. Factors influencing their motivation and loyalty will also help in this. To make such strategies more instrumental and detailed, it is necessary to discuss the issues of motivation and strengthening of employee loyalty in the IT-sphere more deeply, which we will do in the last part of the review.