Retaining Key Staff: What High-Tech Employees Say versus What They Do

by Jakob Nielsen on March 4, 2001

Summary: Never listen to what people say in response to a survey: asking high-tech employees what will keep them in their jobs provides very different answers than the factors that actually drive retention.


Getting and keeping good people is one of the greatest problems facing Internet companies. Even with the latest slump in the industry, we still face negative unemployment among people who understand the Internet.

We have all seen the clueless ads looking for Java programmers with ten years' experience. Indeed, those ads started appearing back when not even James Gosling would have qualified. The real issue is not so much number of years as it is amount of insight and skills which translate into real experience. In the human interface field experience is largely driven by the number and diversity of user tests somebody has observed. Some usability professionals run a test per week; others may only get exposure to real people a few times per year.

Assume that you have succeeded in hiring an excellent staff. How to keep it?

At the World Economic Forum in Davos, Switzerland in January 2001, Dr. David Finegold from the University of Southern California presented an interesting study of employee retention in high-tech companies.

The most important finding in the study was that what employees say will keep them in the company is quite different from those factors that actually determine whether they quit. We have seen similar findings in many other studies of very different issues, which is why I always caution against believing what people say in response to a survey. Never listen to what people say. Instead look at what they do . What employees say is important for making them stay at their current company:

  1. Work/life balance
  2. Job security
  3. Financial rewards
  4. Professional career satisfaction
  5. Degree of influence over own work

These all sound very important, right?

 

Well, that's not what makes highly valued employees stay in the high-tech companies in the study.

After running a multiple regression analysis, Dr. Finegold found that there was no positive effect of work/life balance on the retention of staff . People may say that they like to spend time with their family, but giving them such time doesn't make them stay with the company. Self-reported surveys are always a weak source of data, but people's responses are particularly unreliable when it comes to sensitive issues or questions where certain answers are deemed more socially acceptable than others.

Pay for individual performance (typically salary and bonuses) did not score highly as a way of keeping employees, except for men under 30. The only type of financial rewards that increased retention for any other group was rewards based on over-all company performance (typically stock options).

Interestingly, having a viable and well-communicated strategy for success was important for making employees identify with the company but did not make them stay with the company.

The top three factors in retaining staff were:

  • career advancement
  • financial rewards based on company performance
  • innovation and risk

The high score for innovation and risk may be a peculiarity of high-tech professionals, but if those are the types of people you want to keep, you have to give them bleeding-edge assignments.

 

 


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