Making hybrid working work

Tech workers crave stability and belonging

Cassell believes that only 24% of all hybrid or remote workers currently feel connected to their company’s culture, with tech staff being more likely than most to work this way. A further 15% of employees feel their organisation is less predictable than it used to be.

“During times of change, employees crave a sense of stability, and that need is particularly acute in tech,” he says. “It’s significant because those organisations offering stability see a 51% rise in employee engagement, which is a massive number and speaks to just how important it is.”

But he also points out that the word “stability” does not imply an “absence of motion”. Instead, it is about what is described as “controlled motion”.

“As tempting as it may be, we can’t slow down the pace of change in organisations, but we can provide employees with the handholds they need to deal with it. Such handholds, particularly in times of significant technological change, such as today, include doubling down on training and development,” he says.

“This helps employees feel their employers have a plan for them and are investing in their skills for the long term. If people worry their skills are gathering dust, particularly in a fast-moving sector like tech, they’ll be more likely to leave.”

Changing employee expectations

Andy Brown is co-founder and chief executive of leadership and employee engagement consultancy Engage. He, like Cassell, believes that although the tech industry may be experiencing similar talent trends to the wider market, it is also undergoing some particularly severe pressures of its own, making staff retention “even more intense”.

For instance, in general terms, the size of the UK’s overall labour market has shrunk since the start of the pandemic. This means there are simply less people available for work, particularly at either end of the age scale, according to the Office for National Statistics.

But there has also been a significant shift in employee expectations, especially among younger people, leading to a gap between what employers need from their employees and what employees anticipate they will obtain from work.

“Employers haven’t really changed what they need: productivity, commitment, hard work, results, customer service or client service delivery,” says Brown. “But what has really shifted is what employees expect from their employer and how much they’re prepared to put into their work.”

Current common expectations include more flexible working hours, hybrid working when required, and more choice over the work individuals do. “But if that’s set against employers wanting to deliver the same results and output, the gap between the two is creating a challenge, and attrition or lack of retention is the upshot,” adds Brown.

The situation is particularly acute in the tech sector due to its young demographic as expectations tend to be highest in this age group. But return-to-office (RTO) mandates with no explanation as to either the rationale or the benefits have not helped the situation – and can be actively counterproductive.

RTO mandates and skills shortages

As Brown points out, the most engaged employees are generally much keener than others to come back to the office. Once they do so, their engagement levels tend to rise further as a result of increased interaction with colleagues.

“If you explain to people why coming back makes sense, it helps create a virtuous circle,” Brown observes. “People are more engaged and come in more often, which means others follow suit and engagement rises across the board. But that doesn’t happen with diktats.”

Another structural factor affecting staff retention, meanwhile, is the industry’s widespread skills shortages. Such shortages are especially marked in areas such as artificial intelligence (AI) and information security. Despite the massive redundancies of the past few years, this means that most organisations still have skills gaps and find it far from easy to attract and retain the necessary expertise.

This leads to ongoing competition around pay, particularly for mid-ranking employees. To make matters worse, skills shortages are also creating a “polarised workforce”.

“There are those with the right skills for the future who can pretty much demand what they want,” says Brown. “But there’s another group who expect their next employer to upskill them and keep their expertise up to scratch.”

The problem is this can create a lose-lose situation for employers. “They either end up paying over the odds for people with skills or they pay [people] to develop skills who are just as likely to walk away,” says Brown. “You can’t win in tech at the moment.”

Retaining the best performers

One approach that can make the issue less thorny is to focus on retaining the best performers rather than just anyone. These “champions” are highly engaged and productive and usually make up about 45% of the workforce.

The two most risky groups are what are described as “hostages” (25%) and “disconnecteds” (10%). Hostages are defined as those who are disengaged but are happy to stay with the organisation for the long term. This is because they are well-rewarded compared with the effort they put in, or are unwilling to give up financial incentives such as share schemes. Productivity among this group can be up to 40% lower than that of champions.

Disconnecteds, on the other hand, are neither engaged nor loyal to the company and its leadership, and often indulge in saboteur-like behaviour. As such, they are highly critical and oppose any change initiatives.

“People tend to look at retention rates and how to increase them, but what’s the point of retaining those who aren’t engaged or performing?” Brown asks. “You have to think about the situation more deeply as there’s no optimal retention rate – it’s more complex than that.”

There are two key considerations when trying to retain high performers, according to Brown. The first is to enable trust by ensuring your employer value proposition (EVP) matches employees’ day-to-day reality. This is particularly true of new joiners, who are unlikely to stay if there is a mismatch.

The second is ensuring the basics are in place to deliver on the employee value promise. These basics include how the company is managed, how communications are handled and how staff development takes place, as well as the organisation’s values – being clear how people at all levels are expected to behave and what the consequences will be if they don’t.

As Brown points out: “The pressure is now on employers to create an EVP that is sticky enough to make people stay.”

Turning values into reality

Susan Charnaux is chief people officer at business process automation software supplier Appian. The company has grown steadily over the past few years to 2,300 people, through acquisitions and opening new markets.  

As a result, the decision was made to conduct a review to ensure its strategy and values were consistent across the business, with the aim being to “find ways to bring people together and ensure we were culturally cohesive”, according to Charnaux.

The first step was to capture the value statements of the organisation’s founders who have led it since setting it up 25 years ago. These values were condensed into four categories: respect; constructive dissent and resolution; work to impact (not completion); and ambition (to improve the world). They were then discussed with employees at all levels of the business using focus groups and interviews to obtain their input.

“We wrote the values down, shared them and put them in various places, such as the intranet, but really it was about how [to] turn this into something we do every day,” says Charnaux.

In relation to respect, for example, employees are now invited to award colleagues kudos points if they act in line with the company’s values. A new performance review process requires managers to evaluate team members based on specific competencies aligned with the firm’s values. Employees are also requested to illustrate how they demonstrated them in their activities.

But even during the interview process, recruitment managers are expected to have the values front of mind.

“We’re listening out for candidates who align with our values and would work well in our culture,” Charnaux reveals. “We want people who’ll like our ways of working because, if they don’t, it’s best to know from the start.” 

Ensuring organisational resilience

A final consideration in such difficult times for talent retention is positioning it effectively to ensure organisational resilience. Brown refers to one tech company that identified the pivotal positions in its business. It then evaluated whether they were filled by the best people and transferred them into those roles if not.

The second step was to undertake succession planning. This was used to upskill colleagues and create a “bench of talent” consisting of two or three people beneath each critical role.  

“The idea here was if they were poached, there was a backup plan as one of the bench could be moved into the vacated critical role,” says Brown.

The next stage was to identify where the largest “hostage” group in the company was and to either re-engage individual members or let them go. The final phase was to codify any internal managerial best practice for adoption by others and to enhance the organisation’s EVP on the labour market to attract better talent. Data was employed throughout to inform decision-making and enable learning.

“It was quite a simple approach that was well thought through. And it makes sense because getting attraction and retention right is important in all sectors, but it’ll have an even bigger impact in tech right now,” Brown concludes.