How Do We End High Turnover in the Technology Industry?
The technology industry tends to be very good at hiring people, keeping them is an entirely different matter. Gourmet lunches, pool tables in the break room, gyms, and onsite daycare are certainly nice perks but the tech industry has the highest turnover within all industry categories. Average tenure hovers around three years. Amazon and Google, while characterized in the press as wildly different cultures, actually are within .1% of each other with their turnover.
According to David Harder, author of The Workplace Engagement Solution(Career Press), here’s why:
“The tech industry is filled with both employers and employees committed to rapid growth and change. Tech companies routinely displace talent as business models change. On the other hand, if an organization isn’t keeping up with a particularly talented employee’s growth, they are gone in a second. Collectively, these dynamics create the volatile turnover and by extension, can lead to significant engagement challenges.”
In the book’s chapter, What is an Engagement CEO?, David and his colleague Mary Campbell interviewed Adam Miller, CEO of Cornerstone on Demand. They discussed what it means to be an Engagement CEO, a particular challenge in leading a fast-growing tech company in Southern California. Cornerstone on Demand’s culture grew out of an unusual dynamic. Los Angeles had no technology industry to speak of. So, Adam made a series of decisions that have contributed to cultural as well as business success.
David: In an earlier interview you said that by starting in LA, you were put in the position of having to hire potential rather than experience.
Adam: Absolutely true.
David: Is it the same today?
Adam: It is a little less true today because tech has grown in LA. But when we began, B2B marketing and software development were extremely difficult to find in LA. We found it was better to find the people with the right competencies and build their technical skills. We did this by only hiring people that were active learners. You describe this need throughout the world. Well, it is truer in a tech company. It is exponentially truer in a hyper-growth company where we have to find people who are capable of moving up from the baseline. Most tech companies don’t operate that way. In hyper-growth, they regularly pull out the individuals that are not keeping up with the growth. The way we did it here, the reason we have had such stable and high retention is that we hired people that required the same characteristics of active learning and an interest in personal growth. We hire the ones who demonstrate they want to learn and are ambitious. As a result, they have grown with us.
Mary: I bet you had some casualties.
Adam: Very few. It could be said that we defy the odds because, in so many organizations, only one to two will make it because they are exceptional. I am saying the opposite. Only one or two did not make it because everyone had the attributes. Our people make it because they are continuous learners when they arrive as well as in the parochial process because these are the people that get promoted.
Cornerstone on Demand’s success reminds us of Germany where talent rarely discarded due to change. In this country today, it is the norm for talent to be constantly being trained to stay ahead of change as it happens. Consequently, the country has the lowest unemployment in developed countries and underemployment is virtually unknown. For example, the country’s automobile industry makes full use of robotics but has not had any mass layoffs. As technology moves forward workers are trained to solve solutions and lead process rather than engage in more repetitive work.
The Workplace Engagement Solution includes a central premise that if we want to build engagement in the modern world, we need to build active learners. Consider that Cornerstone on Demand was founded in 1999. By identifying the need for workers filled with potential, Mr. Miller also had to build an organization that accommodates that potential. The results? Today, not only is Cornerstone a category leader, it has one of the lowest turnover rates in the technology industry.
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