The most successful method of employee retention in the information technology industry Essay



A Research Proposal in Partial Fulfillment

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February 14, 2009



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The most successful method of employee retention in the Information Technology Industry



1        Introduction

The competition in business has increased the demands for quality and skillful employees. This condition generally happens in all industries since those kinds of employees help the business to grow and sustain the competitive advantages.

In order to maintain employees’ competitiveness, business faces some challenges regarding the importance for developing suitable methods and strategy in improving the quality of human resources. This human resource development program is important so that they keep informed regarding the competition in a particular industry, how-to market products, and how-to deal with competitors’ offerings. This effort is important so that the employees keep knowledgeable while preventing turnover.

One of sector that experiences severe employees’ turnover is information technology. This sector experiences such increasing turnover due to the rising demands for computerization in many industries. Programmers, system analysts, web developers, or network managements are some jobs in information technology sector that face the rising turnover.


2        Aims and Objectives

a.       This paper intends to determine the data behind the increasing rate of employees’ turnover in information technology sectors.

b.      Using the non-participant observation method through data collection, and analyzing qualitative information from journal, books, magazine and other online materials, this paper is to determine the appropriate employee retention program that are effective for Information Technology Industry.

c.       In addition, the paper aims at discussing best practice of employees’ retention program that already conducted by leading companies in information technology sectors.


3        Significance of the Study

The importance of introducing the employees’ retention program is to prevent skillful employees from moving to another company. Due to the importance of having proper retention program, the study of underlying factors that drive the turnovers should be determined in details; thus, the offered retention program can match the requirements and needs of employees.


4        Hypothesis

Concerning the development of employees’ retention program, therefore the research statement or question is

“As high rate of employees’ turnover presents perils to the organization since they posses the critical information regarding the information management and the development; thus, what kind of retention program that presents a lucrative offer to the employees thus preventing them from leaving the current jobs”


I choose this research question since it could be completely different from others that may focus only on discussing the employee’s retention program in general, while putting aside the background of employees’ turnover in information technology sectors. For this reason, in the literature review, there will be discussion of factors that become the underlying reasons of rising employees’ turnover, which turn out not solely about the money but in fact due to other factors.

5                    Literature Review

5.1              Motivation and Employees’ Turnover

Employees’ turnover is closely related to the loss motivation. In general, most companies consider the motivation with money, which in fact; money is not the only determinants that influence employees’ motivation.

Money, according to one research, turns out to motivate people in a very short window of time. However, when skilled individuals are poorly paid, they are prone to switch to another company. This condition suggests that remuneration still influence how employees feel about their jobs.

Other factors that influence the employees motivation that further leads to turnover is the uncertain career development, appreciation, rewards, recognition, and good communication. Many times, top managements in a company exclude potential and skilled employees for decision making process. This suggests that appreciation is another factor that influences employees’ motivation. Figure 1 shows the


Figure 1          Statistics of Employees Turnover

Source: FriarTuck, 2005

5.2              IT Staffs Turnover

During the past three years, during the modest growth of economy, the figure for IT staffs turnover is fortunately stable. According to one survey, which carried out in the U.S. and Canada and involving about 200 IT Executives, the turnover rate during the period is stable at 5% (Figure 2).



Figure 2          Statistics of Employees Turnover

Source: Computer Economics. 2009


5.3              Reasons of IT Staff Turnover

There are at least seven identified factors that contribute to the increase of IT Staff Turnover:

Heavier job loads
Employees are not involved in decision making
Too many reorganization that put the employees becoming generalists.
Subjectivity of management decision in staff promotion
Developing internal competition that leads to disintegration
5.4              Employees Retention Program

By looking at the reasons behind the IT staff turnover, below is some suggested retention program. There are about 11 factors that believed to influence the employee retention program as following:

Career Development
Providing the suitable education and training programs
Developing employee recognition model
Job-related operations
Flexible schedules
Encouraging work environment
Having the Insurance benefits
Telecommuting opportunities
Financial Benefits
Lucrative incentive pay/bonuses
(Computer Economics, 2009)


6                    Methodology.

The paper will use the qualitative approach that represents a research, which is done through observations. The benefit of using the qualitative approach is it allows a researcher to investigate in little more detail on the individual perceptions of a phenomenon. However, since this research involves the personal, therefore, this investigation is generally limited in its scope.

However, the use of observation method provides limitation since it deals with someone’s perception. For this reason, we are going to avoid preconceptions since it causes the discussion in this paper with some bias. In order to present the thorough discussion, this paper will describe some examples in information technology corporations that practice the retention program.


7                    Limitations.

Since this paper does not involve first-hand information through questionnaire and interview in key person in some companies that are responsible for developing retention program, there will be somewhat lower objectivity in the information presentation and the accuracy of the data also reduced.

In order to alleviate this drawback, we are retrieving reliable data from experts’ analysis, journals and various publications from available media. Using the data resources above, we hope to present an independent and objective analysis toward the contemporary issue.






Boisot, M. (1998). Knowledge Assets. Oxford

Buckman, R. H. (2004). Building a Knowledge-Driven Organization. McGraw Hill

Computer Economics. (2009). IT Employee Retention: It’s Not All About the Money, Retrieved February 14, 2009 from

Zahra, Shaker. (1991). Predictors and financial outcomes of corporate entrepreneurship: An explorative study. Journal of Business Venturing, vol. 6, pp. 259-285