How to tackle the great brain drain in the tech industry

Article by New Relic ANZ solutions consulting senior director Myk Shaforostov.

Attracting and retaining tech talent in Australia and New Zealand is becoming increasingly challenging, with the 2022 Hays Salary Guide showing a startling 91% of employers facing a skills shortage. This is hindering growth and operations for 83% of organisations - the highest level in the 43 years that the Guide has been produced.

During the pandemic, many skilled workers on visas returned to their home countries - many simply had no choice. Even as borders reopened, strict regulations on immigration made it difficult to lure tech talent from overseas. As a result, ANZ currently relies on a very small pool of tech talent.

The situation has created a two-way brain drain: while overseas talent has returned home, local talent continues to be lured away with highly attractive packages that are hard to compete with. Although COVID has made it easier than ever to work remotely, many ANZ companies, particularly in financial services, require workers to reside in-country due to data sovereignty issues.

One of the problems with a workforce that's constantly moving to the next big thing is the intellectual hole left after their departure. They take with them extensive institutional knowledge, and companies end up with a smaller team that's left to do the same amount of work with less knowledge.

The over-rotation of employees moving between different organisations impacts technology teams as well as business leaders. Business leaders need the best talent to build great products and remain competitive, and technology teams face huge challenges attracting and retaining the talent that they need to build, scale, run and maintain their applications to the high standards required.

How can organisations tackle this crisis?

Offering flexibility

People want the ability to choose whether they work remotely or come into the office, and organisations that force staff to be physically present in a workplace can probably count on a bigger brain drain. According to Accenture, 63% of high-growth companies have adopted a "productivity anywhere" working model, and 83% of workers prefer it. The days when ping-pong tables or beer on tap were highly valued are gone as they favour the flexibility that hybrid work offers.

Fostering fairness, growth

While companies with deep pockets can offer highly attractive salary packages, if the work isn't meaningful or staff are overworked, top talent won't stick around. Diversity, equity and inclusiveness are critical these days. According to Payscale's 2022 Gender Pay Gap Report, women earned only $0.82 for every dollar earned by a male counterpart. Women of all races and ethnic groups and men of colour earn less than white men. To attract and retain top talent, organisations need to ensure that racial and gender pay equity exists.

Offering career development and upskilling opportunities is critical and benefits both employees and the organisations they work for. Learning and development is also vital for retaining talent. In its From Great Resignation to Great Reimagination report, Deloitte notes that organisations can "aim to satisfy restless employees" by offering new learning or rotational positions. Investing in people is investing in growth and competitiveness.

Providing the right tools

Developers and engineers want to be doing meaningful work, not menial tasks. Having to constantly deal with alert fatigue and fire drills is not what they signed up for. They want to be writing code and building great products that delight customers. If engineers are doing meaningful and interesting work and given the opportunity to grow by learning and being challenged in the right way, they are more likely to stay. Spending time on low-grade, repetitive tasks that could be automated is a waste of resources, particularly when skills are scarce. Valuable tech staff should be working on high-value projects to drive growth, and organisations need to invest in tools and/or automation to make working environments for developers and engineers as frictionless as possible.

These approaches and cultural changes need to come from the top with the full support of the wider business. For many organisations, it's a significant adjustment. Businesses who once perceived the IT department as the "help desk" must now recognise them as one of the most business-critical departments in terms of driving innovation and growth. Evolving business culture to attract and retain skilled developers and engineers is vital not only to grow, but also to remain competitive.