By Ian Cook, VP of People Analytics, Visier

It is no secret that skills in the tech sector are in short supply and equally high demand. This has placed the power in the hands of tech talent and shaken up the labour market. This shift has meant that tech companies must lean on innovation to attract and retain their best talent, especially through the rollercoaster of labour market trends witnessed over the last year. from The Great Resignation, to Boomerang Employees and more recently, Quiet Quitting.

The tech industry is not alone when fighting for staff and skills. Last month, the UK government  announced the launch of its Scale-up visa program, in a bid to encourage businesses to sponsor quality tech talent, as part of a wider initiative to grow the UK tech sector and create a further 680,000 jobs.

Given these lofty ambitions, being able to attract, retain, and develop the best in the business is critical, yet many tech firms still struggle to excel in this domain. According to the Harvey Nash Group Digital Leadership Report, as many as four in 10 tech firms admit they can’t keep key people as long as they would like.

Despite the importance of employees, many tech players continue to lean too heavily towards prioritising innovative ideas and products rather than emphasising the importance of developing a people-first culture that underpins this.

Of course, we are all aware of tech companies going to extraordinary lengths to draw talent in ahead of the rest, implementing unique perks ranging from massage rooms to sleep pods that catch the eye of candidates. Yet such efforts form only a smaller part of a much wider talent attraction and retention puzzle.

To succeed, tech firms must not paper over the cracks with gimmicks. Rather, they need to look beyond on-site amenities to keep staff happy – something that many are currently failing to do,

Leading with a people first approach

With IBM reporting that less than half of employees give their employers high grades on meeting their expectations in key areas such as career development and advancement opportunities, it is clear there are significant gaps which need to be bridged.

To better align with the expectations of talented tech employees that are becoming both increasingly important and hard to keep hold of, firms need to take a more innovative approach to not just process and product development, but equally people.

Here, the effective and informative use of data can be transformative in attracting and retaining those individuals who are tech-talented but prefer to work for companies that care about their daily needs and mental and physical wellbeing.

Indeed, those firms that invest resources to develop a top-notch, data-informed people analytics function with the right mix of people, processes and technology will reap the rewards on several fronts.

Finding the best in the industry

Currently, many organisations struggle to measure key recruitment metrics, resorting to gauging success almost solely on time-to-fill quotas that offer little insight. By embracing data analytics in recruitment, businesses become empowered to unlock more granular details such as diversity slates, cost of hiring and the quality of hires.

Over time, the information gathered from these data points can help firms understand where their top-quality talent is coming from, what makes them succeed, and what makes them stay at the company — insights that can then be used to improve the effectiveness of your talent acquisition process.

Holding onto the best talent

Predictive analytics can also be used to determine who is at-risk of resigning so that you can take proactive steps to keep the right talent, as opposed to solely relying on gut-feeling.

According to our latest market survey data, 71% of British workers say they do not feel that their employer has adequately kept up with the cost of inflation, deeply impacting employee retention. Visier market survey data suggests that increasing living costs have led to a growing trend in ‘reverse retention’ tactics, whereby employees threaten to leave their current place  of work in the hope of securing a better employment package to prevent them from doing so.

It can be tempting to implement on trend and attention-grabbing perks. Yet to make truly impactful and sustainable changes that enhance employee retention and reduce the risk of these tactics being employed, firms need to recognise that retention programmes work best when they are uniquely targeted to the needs of staff.

Instead of making changes based on perceived demand, organisations should look to leverage data-driven insights to uncover drivers and underlying trends underpinning turnover.

Ensuring a diverse workforce

Additionally, an effective and data-driven HR function can help to improve workforce diversity, something that has become pivotal to unlocking the full potential of enterprises.

Interestingly, research shows that companies with low rates of both gender and racial diversity are 29% more likely to make less money. Yet despite the benefits, this continues to be an area in which tech companies struggle.

According to Diversity in Tech, only 15% of the tech workforce are from BAME backgrounds and gender diversity is currently sitting at 19% compared to 49% for all other jobs.

Fortunately, tech companies can tilt the balance in a more diverse direction by adopting people analytics to monitor key diversity metrics. By keeping track of the demographics of applicants at the interview stage of your hiring process, for example, you can identify key issues. If you don’t have at least one female or ethnically diverse person in your slate, it’s a sign your sourcing channels aren’t working.

From candidate surveys to relocation expenses to recruiter performance, connecting diverse sources of data can uncover root causes needed to increase the diversity of your candidate and hiring pools.

Without question, the successfulness of HR practices will be pivotal to companies looking to gain an edge in the tech talent war moving forward.

With the government’s ambitious effort to see the UK as the leading country for tech innovation, growth and business start-ups, business leaders must take action now. And the solution sits within using innovation to invest in the people that can make this a reality. Businesses who are not only able to understand their employees through people data, but who also effectively invest in them through inclusive, flexible and generous workplace packages, are more likely to attract innovative – and loyal – employees. Employees like this will serve your customer better and therefore allow you to accelerate ahead of the competition.