IT vendors with low attrition rates - where to find them and what makes them unique?
The largest IT vendors in the world are often associated with high attrition rates. This means a lot of their employees jump ship before finishing a project, which is bad news for clients and the overall business. Replacing an employee may cost even two times the employee's annual salary. And that’s only a rough estimate that doesn’t take into account the project delay and other factors.
Fortunately, vendors who keep low attrition rates for a long time also exist. Some of them keep them below 10%! The key difference is that these companies focus on their employees first - by supporting their professional growth and creating an environment where they can flourish.
How can you find these vendors? Why exactly is attrition so important? What’s the attrition rate at Maxima Consulting? Read further, as we will answer these questions below.
What is a good attrition rate?
The Oxford Dictionary provides a simple definition of attrition:
“Attrition is the action or process of gradually reducing the strength or effectiveness of someone or something through sustained attack or pressure”
In the business context, the employee attrition rate is something that tells us at which rate people leave a company. Attrition has a huge influence on the health of the company and gives us a hint if the employees are happy. Whenever A-players leave an organization, it’s difficult to replace them, and the whole organization suffers from reduced productivity. A high attrition rate also means that achieving business goals is more difficult than it could be.
According to a 2019 North America Mercer Turnover Survey, the average turnover rate in all organizations in 2018 was as high as 22%. Another study by XpertHR analyzed the average turnover rate by profession in the UK. It showed that HR and Education fields had the highest turnover rates in 2021, while Administration and Management had the lowest.
According to LinkedIn, the average turnover rate is about 10%. Unfortunately, in many cases, it’s much higher. While the global IT and business process services industry experiences a lack of talent, the attrition rate is steadily growing. A few spikes resulted from the pandemic, but even at the end of 2021, the average attrition rate of professional services organizations worldwide globally was as high as 14 percent. Of course, it depends on the country, the company size, and other factors.
You can use this formula to measure the attrition rate at your company:
Attrition Rate = Number of Attritions/Average Number of Employees * 100
At Maxima, we believe that all companies should do their best to achieve a zero turnover rate for their Subject Matter Experts because people are the true strength of any business. We also know that it’s possible to create a strong workforce that gradually evolves into A-players over time. Juniors in your company should be given support in advancing their careers - so that one day they can become experts that the market so desperately needs.
How to find vendors with low attrition rates?
Sometimes, calculating the attrition rate of a business can be difficult, especially if it’s not a public company. In these cases, a median tenure on LinkedIn can be an acceptable substitution. You can find it by going to a company’s LinkedIn profile, clicking Home, and scrolling to the bottom, where you will see it.
This can give you a fair first impression of the company. Compare the number you see with the year the company was founded, as a tenure of 2 years is pretty good for a 3-year-old company, but not so much for one with decades on the market.
A respectable median tenure in the IT sector is usually above 3 years. This industry is very dynamic and competitive, so when people stay at one company for more than 3 years, it usually means that this company is doing something right.
Another way to find an IT vendor with a low attrition rate is to go to Google and type the company name + attrition rate. Some companies publish such reports, and the search engine will give you the answer in seconds. You can also search Glassdoor to find out how many employees would recommend the company to a friend and how they rate it.
Another surefire way is to just ask the IT vendor. HR and Business Development people in these kinds of companies are usually easily reachable on LinkedIn and will commonly answer your question straight away.
Other ways to see if an IT vendor has good attrition
A strong workforce is an engaged workforce. If the employees of a company are active on social media and share their knowledge or work experience publicly - it’s a good indicator of healthy company culture. As IT Vendors are typically engaging with their clients to solve problems, perhaps suggest asking your POC to speak with a specialist, or during a discovery call check with the team to see how they like the company, how long they’ve been part of the firm, etc. These simple questions often (but not always!) give a good pulse check on the company.
Research shows that employees want training opportunities, learn new skills, and maintain work-life balance. Organizations that take up initiatives to support their employees' hobbies, education, and career development are most likely to have low attrition rates.
On the other hand, if a company is not flexible enough and doesn’t take employee feedback seriously, it will increase attrition. For example, service providers who refused to embrace hybrid or remote work after the Covid pandemic suffered more resignations, as their employees tried remote work and didn’t want to go back to the office.
Companies with low attrition rates recognize their employees, pay attention to the market, and do their best to hire people for the long term. Technology vendors are always looking for people with niche expertise who know what they want to achieve. Such experts are hard to find (and keep), but they synergize technical and domain knowledge and, as a result, drive better business outcomes for clients.
Why the attrition rate is crucial when choosing an IT vendor?
The most important metric related to attrition rates is the costs. A recent study from Gallup shows that replacing an employee can cost one-half to two times their annual salary.
And replacing any employee is a long process. Hiring, training, onboarding, and acclimatization take weeks or even months. Besides that, to fully replace someone, a new hire needs to gain the trust of their co-workers and create bonds that will aid the team in working together effectively.
More importantly, some experts are irreplaceable. Experts are your trusted advisors who know how to lead projects effectively and how to avoid risk. When they leave, your company loses tons of knowledge - which directly impacts the project a given expert worked on. Without the right specialists in place, your project timeline can be missed or delayed.
Additionally, you should remember that different generations in the workforce have different expectations. Younger generations look for flexibility and exciting challenges that help them grow. It’s not unusual for zoomers and millennials to simply leave if they don’t get what they expect, so they can freely look for an organization more in line with their goals. Research shows that millennials are the generation most likely to switch jobs.
Vendors with low attrition rates can help you avoid such issues. Especially if they take good care of their employees by conducting regular 1-to-1s, regularly increasing their salaries, and providing relevant training.
What we do at Maxima Consulting to keep attrition rates low
Maxima Consulting has an attrition rate 9% lower that the global industry average as of 2021 which is much lower than the market average. We owe it to the people-centric mindset and long-term thinking. When hiring new people, we try to make sure they are a good fit for our company. We know that skills are something we can teach, so we tend to team up with people with the best approach and headset.
Here’s a list of factors that help us in keeping our attrition rate low:
- Optimized employee-facing processes
Finding people who are a good fit for the company is a challenging task, and even if you find them, it’s equally difficult to make them stay. For this reason, we optimized all our employee-facing processes (like hiring, onboarding, and offboarding). We make sure that employees work on the things they applied for, and if anything is off, we quickly take steps to resolve issues.
Low attrition starts with recruitment. During interviews, our recruiters always look beyond the skills and experience presented in the resume. The candidate’s temperament and cultural match are as important, so they could easily fit in - not only with our teams but also with the clients. It’s better to spend a bit more talking about a hobby included in a resume during introductory call than to search for another person just a few weeks later.
In our onboarding process, new employees familiarize themself with our company and see how we operate on a day-to-day basis. We share our knowledge base with them and explain the tools we use. They receive initial training, learn about our management, gradually adjust to their new role, and get acquainted with their new team. But most importantly, they get to see how we will support them in their career from now on.
- An inclusive environment with clear expectations
All people want to work in companies that put employees first. We are aware of that fact and focus on fostering an environment where employees can be themselves. Maxima Consulting operates on 3 different continents, which means we have people of different ages, races, and religions. Nonetheless, we all work closely together and share the same vision. We also offer DE&I training as a part of employee development, so we can better understand each other.
Our managers make sure to set clear expectations so employees can maintain their work-life balance. Each individual knows what they are responsible for and what’s expected of them. When a difficult situation arises, others are always there to help in dealing with it. Then, we do our best to adjust our processes - so it doesn’t happen again.
Obviously, not everything can be fixed immediately, so we keep communication open. Our employees know what’s going on and their input on what steps we should take is welcome. We truly are a team that works towards the same goal.
- Competitive compensation and benefits
Subject Matter Experts deserve a pay structure that reflects their skills and knowledge. Many of our employees are among the best 1% in their craft. And we know how valuable they are - for us and our clients. We make sure to compensate them accordingly and have open discussions about what’s going on with the market and other companies.
We also understand that the salary isn’t everything. Our HR teams know how to keep relationships in teams strong. They regularly organize team-bonding activities, send gifts, acknowledge individual employees, and actively look for other desirable benefits. Each year is different, but our employees always get to experience our people-centric culture in some way.
As a result, even though our employees are approached by dozens of recruiters every year, more often than not, they decide to stay with Maxima Consulting.
- Enjoyable work with flexibility
Some people like repetitive tasks, while others want to be challenged every day. It’s our job to find out what works for whom. We want everyone to look forward to work because happy employees are more engaged. Therefore we always stay flexible and open-minded. All feedback is welcome as we always consider how we can further improve.
We know that our employees want to maintain a work-life balance and have time for their hobbies and families. To make that happen, flexibility is the key. Many of us work from home, but some prefer to work from the office. Our employees have the freedom to choose what suits them better. Remote work is here to stay, and if it translates well to employee happiness, we will embrace it.
Flexibility also means embracing diversified hours of work. As a global company, we learned a long time ago that time differences are not a problem when it comes to getting things done. While it’s important to attend the scheduled meetings, employees can otherwise work at times that suit them best. We create win-win-win situations, where employees are more engaged and improve their quality of work, our company keeps talent in-house for years, and our clients get to work with experts who are happy and productive.
- Growth opportunities
IT vendors recruit experts capable of impacting the global economy. Such specialists know that the market is dynamic, and in order to stay relevant, they have to learn new things every day. This means they have to work on challenging projects, but they also have to take courses and work with other experts.
We support our employees’ career growth by providing them with suitable challenges and all the resources they need to strengthen their skills. Working with diverse people from around the world who all have various experiences is also a valuable benefit. It results in an environment where new ideas and approaches can emerge and be improved.
Furthermore, many companies forget to talk to their employees about decisions that will ultimately affect them, which leads to experts leaving the company. So the thing that probably sets us apart the most is probably our commitment to listening to our employees' opinions. Learning about their goals and motivations allows us to seek ways in which we can support them. For example, if we see that someone would be great at a different role - we talk to them about it. Our employees know they have a stake (and a say) in the company’s success.
- Show appreciation
Success happens more often than we think. We believe that showing public appreciation is one of the best things a company can do to keep morale high. So whenever our team reaches a goal or achieves something impressive, we show it to everyone. Our people feel valued because we regularly acknowledge their work. They know that we understand their contribution to the growth of the company.
Everyone deserves recognition for their hard work. Sometimes even something as simple as just a few words of praise can mean a lot.
- A culture of entrepreneurship
We are lucky to have employees on board who try out new things and are not afraid of challenging the status quo. This helped us put some great ideas to life and taught us that we have to create an environment for new ideas, creativity, risk-taking, and ownership. Experimenting is always beneficial - you’ll either succeed or learn something new. It’s never a failure if you gather new knowledge and insights that improve your thinking.
Our employees come up with great ideas every day, and we encourage them to put them into action. They will get our support while retaining control over that idea. This way, they are engaged, and we get to learn new things. When people speak up and suggest new initiatives, it results in more opportunities for us all. Employees’ engagement enabled us to find new clients, expand to new countries, employ new technologies, and start working in more industries.
- Open and honest communication
No matter the industry or location, communication is (and always will be) crucial. We’ve known this for a long time and optimized our internal processes to facilitate the exchange of information between us and our employees. Each month we conduct 1-to-1 meetings with everyone, so the management can learn about what’s going on with everybody and their respective projects. Besides getting their feedback, we also share regular updates about the company.
Furthermore, we genuinely practice an open-door policy. Anyone can come to the management whenever they have any idea or concern. We discuss things openly with our employees and take action when needed. This approach makes us aware of all the things that are going on in the company - and our employees feel that they have a voice.
Low attrition for successful projects
IT vendors with low attrition rates are hard to find, but this doesn’t mean they don’t exist. Companies that have adopted and embraced a people-centric mindset are capable of creating work environments where employees thrive. It’s worth it - an engaged workforce is productive, carries out high-quality work, and often comes up with unconventional ideas. Focusing on employees is the best thing a company can do if it wants to stay relevant in the market.
At Maxima, we hire first-rate talent, then develop and promote that talent so we can retain it. Leave us a message if you want to see what difference can an IT vendor with low attrition rates make. Maxima Consulting has always been a people-centric company, which means both our employees and clients get the care they deserve.