New Perspectives on Staff Turnover in the IT Field

By Janice Lo - December 11th, 2014
New Perspectives on Staff Turnover in the IT Field by Janice Lo - ©Rawpixel - Fotolia

An average staff turnover rate of 20%  combined with fewer people training for the field and growing needs make it necessary for IT firms to figure new ways to retain employees. Previous research has fully explored the issue of satisfaction and commitment. Now, it is time to look for solutions in new areas.

Professor of Operations Management and Information Technology ©HEC Paris

Janice Lo is professor of operations management and information technology. Her main research interest is information systems (IS) strategy. Prior to joining the HEC Paris faculty (...)

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High turnover has been the norm in the IT industry ever since the 1960’s, and foreseeable shortages in the IT workforce in the near future make the matter all the more deserving of attention. Indeed, demand for database and network administrators, computer software and hardware engineers, systems analysts, and so on continues to grow, while student enrollment in IT education programs is declining. Over the years, a large body of research on turnover in the IT industry has produced numerous suggestions of how companies might more effectively retain their employees, but to no significant effect. Janice Lo suggests it is time to look for solutions in new places. Her review and assessment of existing literature on IT staff turnover draws attention to phenomena that should be understood once and for all. It also reveals new directions for research that can build on what has already been proven to uncover more effective ways of reducing the impact of staff turnover on IT firms.

What we know about IT staff turnover

Janice Lo’s review of the IT staff turnover literature highlights a number of well-documented job factors that should by now be common knowledge. Extensive research shows that IT professionals’ decisions to stay with their firms or go elsewhere are directly related to job satisfaction and commitment. The greater people’s satisfaction with their jobs and emotional commitment to their companies, the more likely they are to stay with their firms. In addition, people are less likely to leave when the job market seems tough or they are approaching retirement. “Job-related factors are probably the most frequently examined factors in studies of IT turnover,” says Janice Lo. Research has accurately identified individual and organizational factors that impact turnover among IT professionals, many of which have proven consistent across national borders. Attributes including autonomy, task significance, and good pay have a positive impact on job satisfaction and thus employee retention, whereas exhaustion and work overload have a negative impact on satisfaction, thus increases turnover intentions. This insight remains relevant, but putting it simply, Janice Lo says, “There is no real need to study these factors any further.”   

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Turnover also creates openings to hire other employees who can bring in new ideas and ways of thinking



New question: how can IT firms better absorb turnover? 

We need to look for solutions to turnover-related challenges in IT fields in new places. “I think there are two important questions that research has not sufficiently addressed,” says Lo. “First of all, instead of asking ‘how can IT companies retain all of their employees,’ we should ask ‘how can they retain the right employees,’ meaning the people who are the most effective and efficient.” Depending on a person’s role, the impact of his or her departure on the organization increases or decreases. Is a departing worker a project leader, or does he or she hold a less central role? Janice Lo explains that talent retention should be considered in conjunction with other factors. Turnover is inevitable, but what really matters and is potentially very disruptive to an organization is losing critical talent. Research should therefore address a more focused question of how to deal with — and even anticipate — the departure of critical talent. Perhaps IT organizations should train successors for people holding critical positions in advance. Janice Lo points out the common business practice of grooming successors for CEOs, which is akin to the standard performing arts practice of having understudies. The show must go on in market businesses as well. The second, virtually unexplored issue that Janice Lo says should be explored is timing. The specific time at which a person leaves a team or company makes his or her departure more or less significant. For example, if a member of a group project wants to leave the firm, the impact of his or her departure might be less potent if the group is just starting the project, highly disruptive if the group is in the middle or at a critical point, and again, less critical if the project is coming to a close. “The timing of a critical employee’s departure is something that companies should try to manage,” says Janice Lo. “It is a very significant issue in terms of turnover impact, and yet I have only found one research article that took an interest in the matter.” Janice Lo adds that a basic assumption of nearly all studies on IT turnover is that turnover is bad. They therefore focus only on how to decrease it, disregarding the fact that there can be positive aspects to turnover and movement. Particularly in IT, migration of employees within the profession may be beneficial. Turnover “may serve as a way to prevent employees from becoming stagnant and losing interest in their jobs… [It also creates] openings to hire other employees who can bring in new ideas and ways of thinking.” 

Contrary to popular belief, IT is not unique 

In her review and assessment of IT turnover literature, Janice Lo states, “few concepts seem especially unique to the IT workforce.” While this may come as a disappointment to people convinced that IT is unique, it actually means that managers in IT fields can benefit from insight from general management and psychology research. Similarly, findings from IT studies are applicable to workers in other fields. That said, Lo mentions one study that revealed one way in which IT professionals are indeed different from others. When it comes to deciding to leave their current organization, they take any of a large number of decision paths, significantly more so than other professionals. This might be worth further exploration, but Janice Lo stresses that IT employees otherwise seem to behave the same way as people in other fields. “You often hear about the need for IT people to retool and retrain, but this is hardly unique to the IT profession. Who doesn’t have to keep up with new developments in their field?” Consequently, future research should, according to Janice Lo, “reevaluate the aspects of the IT profession that are truly unique and use these aspects to better manage the turnover of talented and productive employees.”

Based on an interview with Janice Lo and her paper, “The information technology workforce: A review and assessment of voluntary turnover research,” published Information Systems Frontiers: A Journal of Research and Innovation , January 2013

Practical applications
Practical applications

When it comes to turnover, companies should ask: who do we want to retain and how can we time departures to reduce their impact? While turnover can be natural and even healthy for an organization, it is important to keep the right people satisfied. This especially means those with critical talent who fit in well with the corporate culture. “Retention begins with the hiring process,” Lo says. “Companies should consider how well a candidate is likely to fit in with their corporate culture because this would be beneficial in the long run for both the company and the employee.” In addition, companies should think about succession plans as a way to prevent unexpected employee departure from causing excessive project or organizational disruption. 

Methodology
Methodology

To select articles for the research review and assessment, Lo conducted several searches of the ABI/INFORM database as well as top IS journals using progressively refined key words to identify articles that specifically examined the turnover or retention of IT employees. No date constraints were put into search criteria, and the procedure resulted in 34 articles in IS journals and 11 articles from non-IS journals for a total of 45 unique articles published from 1983 to 2012.