Retaining top talent in a competitive market

Written for Landscape by Alan Furley, co-founder, and CEO at ISL Talent.

Talent is your greatest asset. And as a startup founder, one of your top priorities is to attract and retain the best people for your business.

But there’s a perfect storm brewing in the world of tech recruitment. Reward for tech talent is at an all-time high, wage inflation is spiralling and the balance of power has shifted, forcing startups and scaleups to rise to employee expectations. Meanwhile the pandemic has proved a watershed moment for workers, becoming the catalyst for many to reassess their priorities in both work and life.

The result is a highly competitive jobs market in which many tech startups and scaleups are struggling to retain employees and attract new talent.

The Great Resignation. The Great Reshuffle. The Big Quit. However it’s described, retention needs a focus.

So how do you retain your top talent? According to our data, it boils down to the three Cs: culture, compensation and career progression. As a business, you’ll never eliminate employee turnover; however, focusing your resources on what is important and adopting retention strategies that address these, will help reduce it.

Culture is king

People don’t quit a job, or so the saying goes – they quit a boss. The importance of your role as founder is supported by the findings in our 2022 Retention Report: Tech Scaleups where 81% cited a belief in the founder and cultural fit as one of their primary considerations when joining a startup.

There’s a flipside however, with 71% of those surveyed calling out their relationship with their direct manager as the reason for quitting their role.

Losing top talent is a blow, but you need to consider it a learning opportunity. Tech startup employees expect transparency and account management. They want to work where they feel their contribution has a real impact – and they’ll leave if they feel leadership are failing to deliver results.

Our advice is to make staff engagement a priority. Connect to your employees. Seek two-way dialogue through pulse surveys, 1:1s and 360 feedback to understand the concerns and motivations of your team. Focusing on employee engagement will ensure that every member of staff understands exactly how their role contributes to the wider goals of your organisation.

Compensation matters

Money talks, it would seem, with 72% of respondents telling us that dissatisfaction with their salary and rewards prompted their decision to quit their tech role. This view is further supported by the 87% who cited salary and benefits as their top priority when considering a new role, and the 76% of people surveyed who would rather ditch all other rewards on offer in favour of securing a higher salary.

For startup founders grappling with the logistics of scaling whilst remaining cost-effective, this might sound alarm bells. It’s shortsighted however to assume that a generous salary and benefits package alone is sufficient as a talent retention tool.

One way in which startups can compete on monetary value is to offer employees equity as part of their compensation package. For you as a startup, it’s a savvy recruitment tool to incentivise employees who, in turn, feel invested in the business and relate to its value and purpose – something which we know, from our data, is important to tech sector job hunters.

Alongside this, consider staff work-life balance. It’s not a buzzword; it’s the new normal – and one you simply can’t afford to ignore. In fact, a staggering 83% of people we surveyed expect regular remote work as standard.

Our advice is to offer remote or hybrid working wherever possible, with options such as regular in-person meetings or core ‘in office’ days to provide the collaborative benefits of a shared workplace. You could also consider flexitime, a compressed workweek or (for the more progressive startup founders) no set working hours, with success judged on output rather than hours – and the favoured flexible working solution for 72% of survey participants.

Finally, let’s look at professional development. Tech employees will want to know that there is a genuine opportunity to develop themselves and their longer-term career prospects. Your failure to provide training and development opportunities could be detrimental to your ability to retain talent, which leads us nicely into our final ‘C’…

Career progression

A lack of career progression was cited by 79% of respondents as the primary reason for leaving their tech role, according to our data. This was closely followed by a poor culture (77%) and dissatisfaction with their salary and rewards (72%).

Put in place a framework that defines clear progression paths and objective standards to measure whether an individual is ready for promotion. Ensure that managers receive guidelines for answering progression-related questions and put in place an individual plan for every member of staff that includes regular one-to-ones and identification of training needs.

Sometimes seeing is believing, so where feasible, promote from within. Not only does it demonstrate that hard work and talent is rewarded within your startup business, but it can also be a real morale boost to see others succeed and prosper in the workplace.

Your role as founder

Finally, recognise that for at least one of your founding team, retention needs to be a key accountability.

Quality time with your team, creating the space for honest feedback, and transparency about the future are key to help employee engagement and allow you to address retention issues head on.

About the ISL Talent Report

We gathered data from 200 individuals who had left their tech role within the previous four months. Respondents ranged from junior to senior level and all were actively seeking employment within a UK-based tech startup or scaleup. As part of the survey, respondents were asked their reasons for leaving their previous tech role and what their motivations were for seeking employment within a startup or scaleup.

As startup recruiters, we talk to hundreds of candidates each month and are a trusted talent partner to a variety of startups and scaleups. For advise on talent retention strategies or for a sense of the wider talent market, feel free to drop me an email or connect on LinkedIn.

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