Recruitment and retention tips in the IT industry

One of the biggest problems of software development and SaaS companies is the persistent lack of software engineers.

Without them, the constant progress of a whole industry is brought to a halt. This problem is even bigger when it comes to hiring medium and senior developers, who have the privilege of choosing a job position not only according to their salary preferences—but also according to their personal beliefs, culture and other factors.

So, how do you gain more employees quickly and make sure you’ve found the right hire? How do you find what makes employees leave and prevent this from happening? How do you make your employees feel like they are an essential part of the company, thus inspiring them to remain an important part of the team?

There is no simple answer to these questions. Even before the Covid-19 pandemic hit, the software industry already had a deficit of developers. With the remote work boom and the switch to on-demand freelancers instead of traditional employment, things got even more complicated.

Yet, one thing is for sure: the least you can do to improve your hiring and retention is to build a foolproof strategy that will help you long-term.

In this article, we’ll skip all the obvious steps, and offer insight into how Proxify manages to cherry-pick the best of the best freelance developers.

Setting the basics for a hiring strategy

When I say “set the basics”, I don’t mean you should write a good job description and sponsor it on LinkedIn. What I do mean is—check your own employees, resources, goals and objectives, and this will help you learn more about the profile of your ideal employee and where to look for one.

A common mistake companies make is that they don’t spend enough time talking to their current employees and optimizing their current hiring process. This should be the first step: learning, then fixing mistakes.

But, let’s go one by one.

Define your needs

In a company that often requires new employees, it is a good idea to strategize a year (or more) ahead.

Your HR team is probably frequently in a position where they have to ‘summon’ potential candidates from thin air because another team realized they need backup.

This can prove to be harmful because of multiple reasons:

  • Looking for employees in a short term and under pressure can make you settle for the best option you have, instead of thinking about it properly and taking some time to tap into other factors, such as company culture, previous experience, their own expectations and goals, etc.;
  • It can be more expensive and time-consuming;
  • It disrupts the team dynamic every time another member is added.

So, take some time to think about your needs, and what would it take to be changed in order to achieve them. Here are some things to ponder about:

  • How long on average do you want the hiring process to take?
  • How many employees and in which teams will you need to hire?
  • How can you streamline the hiring process and “recycle” it for future hires?
  • Can you rely only on your HR team, or do you also need the help of a recruiting agency?
  • Can you reach out to candidates you didn’t previously hire for a different position?
  • Is your company striving for better diversity, inclusivity, or fulfilling any socially-responsible objective?

Once you’re able to answer these questions, you can move on to the next step.

Create a database of all previous job ads

When something works well, don’t fix it. Just make sure you document it somewhere and learn from it for future needs.

Same with job ads: you should have a database of all previous jobs you were hiring for and data about how many people each one has attracted. The copywriting in job ads is very important, and for this reason, you should have a way to stash them and reuse the successful examples to shorten your process.

A/B testing can help you learn what is the best strategy

A/B testing is also a very useful tactic to pinpoint the most effective channels, media and approaches in hiring. Is LinkedIn enough? Should you also post on local job boards? Should you invest mostly on platforms such as Indeed or Glassdoor?

The format of the job ad and what it says about the position is also something you can experiment with. Do people care more about the benefits, or is a salary range more important? Make sure you learn more about these details, as they can help you write better job ads and post them on the right platforms.

Pick the right channels

I already tapped into the platforms and job boards before, but here are some that you should definitely check out:

  • LinkedIn
  • Indeed
  • ZohoRecruit
  • ZipRecruiter
  • iCIMS Talent Cloud
  • Dice

At the same time, if you are hiring locally (and that can save you money and time by targeting a smaller crowd), research what are the best and most popular job boards in the respective country. When it comes to traditional employment and in-office jobs, this can be a much better option than digging through thousands of applicants’ resumes on world-famous job boards.

Learn from your current employees

When thinking about the ideal employees you need to target for future hiring purposes, look no further than your current employees to know their exact profile, media channels, wants and needs.

It is a good idea to poll your employees every once in a while about their experience working with your company, and what they would pick out as the best things about it. That way, you can offer interested candidates value propositions and benefits that are truthful and they can be sure to find in the new job.

Whether you have face-to-face interviews or simple online polls (even anonymous), your current employees can help you learn a lot about what makes the workplace tick.

Focus more on newcomers: they have gone through the process of hiring, onboarding and getting used to the structures and processes of the new company, so they can really name some of the things that need to be better and some that work just fine.

Hiring in different levels of seniority require different approaches

Whatever you do to approach future employees, keep in mind that there is no “one size fits all” strategy when it comes to hiring.

Entry and junior-level developers’ positions can usually be filled by offering a better salary or benefits than competing employers. Being more vocal than others about flexibility, transparent wages, days off, healthcare and leave policies can only help.

But, with senior talent, you might require appealing to them in a different way. Hiring employees with a higher level of seniority is a very persistent problem in the software industry. How do you hire someone with 10+ years of experience in a particular expertise? That is often the biggest issue of recruiters and hiring managers.

Talk to them and how they see their future. Maybe they want to be seen as future leaders. Do they want to be included more in management, or do they see themselves as working in the same field because they enjoy it? Offer them a way to customize their job position if possible, and learn from them and their wishes.

Make sure you practice what you preach

A common issue I have often stumbled upon in my personal job-seeking processes is coming across companies that claim one thing but offer another.

Companies sometimes like to toot their own horn and promise great things to employees, but fail to deliver. I personally have been part of a company that promised flexible work hours but created a culture of “hustling” in which employees are criticized if they don’t work overtime. And I can tell you that words spread fast, and many people started leaving because of burnout. And they didn’t shy away from sharing that with prospective future employees.

With the existence of Glassdoor and LinkedIn reviews, it is very easy for current and former employees to share their experiences working with your company, so be truthful in what you promise. It is okay if your company cannot afford to be flexible, or offer amazing things for their employees. It isn’t, however, to promise that and never deliver.

Hiring remotely

If your workforce isn’t limited by geography, time zones and expectations to show up and work together in an office, then hiring happens on a much bigger scale and field. Take it from us at Proxify: we have more than 1000 developers from many different countries, unified by one main thing—looking for better work opportunities.

When you’re trying to employ the best of the best remotely, here are some tips that can help you streamline your process and be more efficient in your search for employees.

Decide what you are looking for

When hiring remotely, you can’t have in-person interviews, visits to the office and multiple shots at making sure that an employee is a good cultural fit. Asking for references from mutual contacts is also harder.

A bigger talent pool will undoubtedly come with enormous benefits. Having the best global talent to choose from makes it possible for companies to hire abroad and scale quickly. It even allows companies to save on wages, yet at the same time offer developers much bigger salaries than what they would make in their respective countries.

On the other side of the coin, though, it will bring upon a larger number of applicants too, and the process of selection and interviewing is also longer that way.

So, before you start hiring, you should take some time to draw out a work process and select the criteria. Not just the obvious criteria such as salary requirements, experience, seniority and education, but also the soft skills that can make all the difference.

In an online poll by Remote.co, companies first-handedly speak about the remote hiring process and what traits can make a difference in picking a candidate. Here are some of the most common:

  • Confidence in their skillset
  • Culture fit
  • Organizational skills
  • Previous remote experience
  • Time management and ability to respect deadlines
  • Teamwork
  • Charisma
  • Professionalism

Of course, you know best what your company needs most. But, whoever is doing the selection and interview process, needs to be on the same page with management about what you are looking for in this employee that will be working remotely.

Technical tasks, online interviews and which questions to ask

It is very likely that you will have to conduct multiple interviews to assess each aspect of the technical and personal abilities of future employees. The usual process goes like this:

  1. After reviewing the application and deciding the candidate has sufficient experience and extra skills for the position, the recruiter does the first screening
  2. If they have a positive opinion on the applicant’s character, professionalism, manners and other criteria, and their salary expectations and start dates match the conditions of the employer, they can move on to the next task: technical test. The technical test can be done online in real-time, or in the applicant’s own time if they can deliver it as a final product to the recruiter.
  3. Once the task is reviewed and the applicant has passed the test, they are about to meet their direct manager or another company representative they are going to work with directly. What matters most at this point is if the candidate is a good cultural fit and if they “click” with the rest of the team.
  4. After passing the third step, the applicant is given an offer and if they sign the agreement, the onboarding process begins.
  5. The new hire starts with work.

So far, this all sounds very standard and straightforward. It happens the same way in person, except you have more control over their test assignments and can be a better judge of their demeanor as well. So, how can you make sure you hit them with the right questions on a remote interview?

Once again, you should really know what you are looking for exactly. In my experience, remote work cannot possibly be efficient if the employee cannot manage their own time and follow the processes and structures that are put in place to ensure efficiency.

A person that likes structure and routine can make a good remote worker. But, that doesn’t mean that you as an employer agree with me. If I would ask them about their ability to follow structure, maybe you care more about their ability to think outside the box and work flexible hours.

If you can’t handle it alone, leave it to the pros

Hiring freelancers in the software, marketing and design industries is so fast-paced and complex, that at this point this is an industry of its own.

Luckily for companies looking for vetted and high-skilled software engineers, there are companies that do this for an affordable price and amazingly small timeframe. One of those companies is Proxify, and you can learn more about our services and pricing to see if they would make a big difference in your hiring.

Other options are outsourced HR managers and talent hunters, or staffing and recruitment agencies. Different services and business models come at different pricing, with the key differences being in vetting, internal management, invoicing and other benefits.

What is retention and why does it matter?

In an industry as dynamic and fast-growing as software development, the labor market is equally dynamic. In fact, five sub-industries within it have the highest percentage of employee turnover: a staggering 13,2 percent.

Industries with highest turnover LinkedIn Talent Blog

Industries within software with highest turnover DevsKiller

The constant change of jobs for talent, and “shedding” of employees that can cost companies thousands of dollars and work hours on scouting new talent, is called employee turnover.

Retention, on the other hand, is the process of working towards building a positive experience, strong relationships and beneficial positions for the workers, so they are empowered to stay and work in the same company.

Retention focuses on the voluntary leaving of a particular job, for personal reasons such as being made a better offer by another company, better salary, need for change or simply feeling apathetic at the same job for a long period of time. Involuntary reasons for job changes aren’t in the focus, as this happens due to being laid off for underperforming or the company shutting down.

Seeing they save a lot of time and money and produce loyal and thriving employees, employee retention strategies should be at the top of the priority list for companies and their HR teams.

The key goals of employee retention are:

  • To improve employee engagement
  • To notice the signs when an employee loses interest and might leave
  • To empower the high-performing employees and reward them for working hard
  • To form strong bonds within the organization
  • To provide different leadership styles for different teams when things aren’t working optimally

Since retention is very specific for different companies and business models, it is hard to offer one employee retention strategy for all of them. HR experts and community managers are usually tasked with knowing the employees and their career path, staying close to them and making sure they have an answer to most of their questions.

They should also know how to inspire them to share their issues at work and give them an environment where they can thrive and want to stay a part of.

The main benefits of a good retention strategy

Happy and productive employees make a happy and productive company. But apart from this statement, there are other, tangible benefits of ensuring that your employees don’t often change jobs and leave your company.

Here are the most prominent ones:

  1. Reducing the cost: When you pile up the loss of an already-trained employee, advertising on job boards, work hours spent in scouting for their replacement, work hours spent in interviewing, the time they need to be able to optimally and confidently do their job, you can see how expensive it is to lose an employee. In tightly-knit teams, sometimes it happens that one person leaves and the team has low morale or loses the cohesion without that person, so a trickle-then-stream scenario happens. And if we consider senior management employees or even founding members of the company, the cost to replace them can be much, much higher.
  2. Bigger budget for training and employee satisfaction: If instead of spending all your budgets on making new hires, you can spend some dime (and time) on improving the work experience and knowledge of current employees by offering them more benefits and training; this will create an even lower turnover rate.
  3. Better cohesion and morale: Working in a team where someone leaves every once in a while is a very stressful environment that hurts the morale of the employees. Everyone has probably worked in a stressful environment where employees would quit in flocks. This leaves a mark on the individuals too and leaves a very bad impression of the management for everyone. Believing that your company doesn't try at all to keep its employees (and sees them as expendable) can be a huge issue for everyone involved. This can also be prevented with a proper retention strategy.
  4. Better organization: Every time an employee leaves, valuable knowledge is also lost. No matter how good your company is in documenting and organizing data and processes that that employee took care of until then, a part of it is lost with them leaving the company.
  5. Customer satisfaction and better revenues: Be it because customers had a good working relationship with the employee you lost, or because you have to focus more on hiring more instead of converting leads into customers, this can also harm your sales and customer experience.
  6. Stronger company culture: You can’t talk about how amazing your company culture is, if an employee leaves every month. Good company culture is reflected in a happy and consistent team, which comes with a low turnover rate.

How to calculate the employee turnover cost

According to The Predictive Index, there are ten main indicators that you need to factor in when calculating the turnover cost:

  1. Salary plus benefits of the employee that quit at a daily rate;
  2. How long will the post be open before you can fill it;
  3. Salary of the manager in charge of recruiting and screening applications on a daily basis;
  4. Advertisement costs for the open position are estimated;
  5. Estimated number of hours spent reviewing resumes;
  6. Estimated interview hours, including phone screens, for all parties involved;
  7. Background check costs;
  8. Salary of the hiring manager or trainer on a daily basis;
  9. Total number of days the recruiting manager or trainer will spend with the new hire;
  10. The number of working days in the first three months of a new hire (the onboarding and ramp-up period).

The final number, they report, is calculated by this formula:

“Employee turnover cost is calculated by taking your vacant position coverage cost plus cost to fill the vacant position plus onboarding & orientation costs plus the productivity ramp-up cost multiplied by the number of employees lost in that position in a given year multiplied by 12 to give you your annual rate.”

Cost formula

Lowering the turnover rate

When building your strategy, you shouldn’t follow a draft or focus only on obvious details. As I previously stated, every company and culture has a different situation, molded by the business model, number of employees, leadership style, industry, etc.

But, some things that are often overlooked can prove to be helpful in your retention efforts. Here are our best tips.

Learning from within: Why exit interviews matter

In my 10 years of work experience, including a big transfer from journalism to content marketing, not a single workplace has held an exit interview with me yet. And most of the time, I did have helpful and sincere constructive feedback to give them, that can help them not make the same mistake with future employees.

Exit interviews are super important because they can tell you not only what was the final push for that employee to make the decision to quit, but also what was the good part of working for your company.

This will help you focus on the things you do well and make them even better, and some insight into what that employee considered to be insufficient or a bad experience for them as a part of the company.

Chances are, their reasons are highly individualized and you cannot put them in a box with others. But, if you see a pattern or common reason, then that is your Achilles heel that you should work on improving.

Using Glassdoor and similar platforms

Who doesn’t fear the loathed review platforms? Whether you are a restaurateur, Zack Snyder after Justice League or a company facing bad reviews from previous employees, platforms such as Glassdoor can be a scary thing.

Unless you use them to your advantage!

Potential candidates often check these stats to make sure they are joining a company that treats its employees well, so make sure to ask for a positive review from happy employees and ones that are leaving because of personal reasons but had a good experience with working in your company. The exit interview is a good time to ask for this small favor.

Improving the working environment

It is also a good idea to poll your employees periodically, to learn from them what it is that they would like to change in your company. Whether it is something trivial such as a new coffee machine, or them being able to bring their pets to work, all the way to more impactful things such as equity and bigger salaries, it is good to consider their opinion.

After all, they spend the majority of their time working for your company, and you should provide them with a good, empowering and inspiring environment that meets their needs.

Company culture

A company and its employees' attitudes and behaviors are referred to as company culture. It can be seen in how employees connect with one another, the values they hold, and the decisions they make.

The work environment, company mission, leadership style, values, ethics, expectations, and goals all contribute to the company culture.

A company's culture might be fostered explicitly and purposefully, or it can simply be the product of a series of decisions made over time. Employees that work in a firm with a strong culture understand the expected outputs and behaviors and act appropriately. Needless to say, it’s far more than free coffee and a pool table.

Some companies have a team-based culture that values employee participation on all levels, while others have a culture that values formal, traditional, or hierarchical management—a corporate culture.

Employees value company culture because their needs and values are aligned with those of their employers. You'll be more productive and create stronger relationships with coworkers if you work somewhere where the culture is a good fit.

Employers value it as well because employees who fit in with the business culture are more likely to be not just happier, but also more productive. When an employee fits with a company's culture, they are more likely to want to stay for a longer period of time, which minimizes turnover and the costs of training new workers.

Google is a company famous for its culture. Even though it is a huge company working on cutting-edge technology, its employees seem to be treated with an individual approach, respect and appreciation for their knowledge. They are inspired to learn more, venture outside their usual skillset, as well as try the newest of technologies. It is a masterclass in corporate culture nurtured from the lowest to the highest level.

Employer branding: what is it and how will it help you?

To explain it in short, the process of an employee positioning and marketing the firm as the greatest choice to the organization's target demographic.

According to studies, 75% of job applicants examine a company's reputation and employer brand before applying for a position. Even if they don't have a job, 83 percent of employers believe that the employer brand plays a big impact on their ability to acquire talent, and 69 percent of prospects don't want to work for a company with a terrible reputation.

These results show that employer branding not only aids but also plays a critical role in attracting and retaining talent.

It helps in hiring and retention, as well as making the hiring process easier and faster, resulting in more engaged employees and cost savings.

In the above video, you can see how a company that pledges to eradicate child slave labor in the chocolate industry reflects on them as an employer, and how it attracts people that share the same values and beliefs as Tony’s Chocolonely.

To sum it up…

As I stated multiple times during this very long read, hiring and retaining employees is no simple task, especially in the software industry. Each company needs its own detailed strategy, and whether or not you follow some of the simple ideas I offered in this article, you are much more likely to build your own strategy from the ground up with the knowledge you have of your company better than any blog article could tell you to do.

Still, general knowledge and tips from within the industry are always useful, so keep reading the Proxify blog to learn more from your peers and the lessons we’ve learned as a successful outsourcing company in this industry. And if you need help with hiring, drop us a line and learn more about our company.

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