Top 3 HR Challenges Tech Companies are Facing

Jennifer L'Estrange
February 3, 2022

Business owners and HR leaders in tech companies face many of the same challenges as other industries, but they sometimes experience these challenges to a degree that we don’t see in other industries. Whether it’s attracting great talent or building a strong company culture in a remote work environment, the tech sector is leading the change narrative for current and future employment practices.

1. Recruiting and Retaining Top Talent

Everyone is struggling with recruiting these days. We’ve read –  and written  – articles related to the great resignation, the war for talent and the challenge that companies are all facing to attract and retain the right talent for their organizations. Tech is no exception, however, some have been more open to changing their recruiting practices to adopt new technologies to keep pace with the demands of remote and hybrid work. Pre-recorded video interview capabilities have allowed them to screen more candidates faster. Peer interviews and group chats, rather than formal interviews, gave them a different channel for communication and a new way to communicate values and culture and generally promote their employer brand. Intuitive recruiting software and the use of qualified HR support have also allowed them to actively source for talent rather than simply posting a vacancy and crossing their fingers the right person finds their way to them. 

Bottom line: take a fresh look at your recruiting process and see what changes can be implemented to better leverage your time, and ensure it is aligned with your ways of working and showcase your employer brand.

2. Handling Remote Onboarding

HR departments have gotten a whole lot better at supporting remote onboarding, yet many leaders still struggle to create the same level of employee engagement we enjoyed when the process was in person. While tech companies were among the first to embrace the world of asynchronous collaboration and virtual work, they also face issues with remote onboarding and communicating culture and values. Essentially, this comes from the challenges related to establishing rapport and then fostering an authentic professional relationship with the new hire. With most of our communication being non-verbal, it’s harder to do that over the phone or even over video. 

To help overcome the inevitable obstacles related to remote onboarding, we recommend a few key process changes. First, formalize the onboarding process to include regular check-in meetings with management for the first 90 days. These meetings will have a specific agenda that encourages the new employee to share openly what they’ve learned so far and where they might need some help. Second, create opportunities for the new employee to develop personal relationships with their colleagues. This can be done over informal video meetups or even dedicated communication channels for topics that are more fun and personal in nature. Third, be upfront with performance management, expectations, and goal setting with new people and make sure that metrics are clear and well understood. All of these components help establish trust between the employer and the new employee and that trust is directly related to engagement in a remote work environment.

3. Managing Turnover

Tech jobs have experienced high turnover for almost a decade, so in some respect, they are ahead of the curve in finding and implementing creative solutions to manage it – and mitigate the inevitable disruption it causes. Firstly, there is “good” turnover and “bad” turnover. 

Good turnover is what happens when an employee decides to move to another job within the same company or organization. In this case, the employer doesn’t lose the intellectual capital the employee has, it’s just moved to another part of the company. And importantly, the next person in the role can reach out and ask for guidance if there are questions after they have left the job. Some tech companies have leveraged this to their advantage, implementing career plans and development programs that encourage internal job moves and, in some cases, moves to another function altogether. If the name of the game is to hire for values, not skills, then moving a great employee to a role that requires re-skilling can be a winning move, especially if that employee is considering leaving the organization. 

Bad turnover is what happens when an employee leaves the organization, voluntarily or involuntarily. Some clients question involuntary separations (terminations) as bad turnover. “How can it be bad if we made the decision?” Any departure represents a productivity loss and an increased expense to the organization, and sometimes it’s very, very costly. Beyond budget impact, there is also the cost of replacement to consider. And finally, we need to consider the root cause; if we’re supposed to have good performance processes, how did this happen in the first place? 

So how can we mitigate turnover risk? First, make sure line managers (or HR leaders) are holding regular career development conversations with employees. These meetings give managers the opportunity to talk to team members about their aspirations and longer term goals and then work together to build a plan to move forward together. Second, ensure your HR department runs a good exit interview. Somewhat counterintuitive, a well conducted exit interview will tell you what’s wrong with your organization and why people are leaving. Use the information captured here to inform your decisions on management development, process change, and adoption of new policies that support business continuity and retention goals. Third, instill a culture that fosters and supports authentic communication. The term authentic is a little overused these days, but it’s still important. Being authentic doesn’t mean you’re telling people what they want to hear or telling them everything that’s going on all the time. It’s not necessarily doing a great job communicating all the time. It’s being true to yourself and others about what, how, and why you’re communicating. You can and will get it wrong sometimes. It’s ok, just be honest about it. 

Guess what’s not going to solve the problem? Compensation. While we all recognize that salary growth has accelerated over the last year, simply trying to throw money at an employee in an effort to ‘get them to stay’ will, at best, delay the inevitable. If you don’t solve the root cause problem, turnover will continue.

Is Your Tech Company Facing Human Resources Challenges?

Red Clover offers strategic and operational HR support on an interim or fully outsourced basis. We only work with companies with fewer than 500 employees and specialize in working with organizations undergoing rapid change. If the biggest challenge in your business is an HR challenge, we should talk.

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