When a direct report considers departing

One significant challenge for engineering leaders is handling the potential exit of a key team member. This article, the second in a series, discusses strategies for managing such situations.

The series:

• How to handle employee departure
• How to retain departing employee - this article

As previously noted, software engineers turnover is common. Research indicates that the average tenure of such an employee at a single company is approximately two years. Various studies support this:

• Zippia's analysis reveals that 45% of software developers stay at a job for 1 to 2 years.
• Hackerlife's analysis indicates that the median tenure of a programmer at major tech companies ranges from 1.5 to 2.3 years.
• LinkedIn's Global Talent Trends 2023 reports an average tenure of 1.9 years at tech companies.

When an employee decides to leave, there are two situations:

• They inform you of their decision to leave but haven't mentally checked out yet. Even if a termination letter has been sent, many things can still happen.
• They tell you they are leaving, and internally they've done it already. Only formalities left. At this point, the outcome is unlikely to change.

The previous article focused on managing the latter situation - how to manage a departure. This piece will explore strategies to retain a departing engineer. Here, you can find a cheat sheet PDF that sums it up.

Assessing the worth of retention

Before planning your retention strategy, ask yourself if it's worth it. When new leaders face such situations, they often think, "What am I going to do now?" It's a normal reaction to a crisis, but taking a step back and assessing the situation calmly is crucial.

Consider this: there are only two ways you part ways with an employee – they leave, or you fire them. Seeing an employee's departure as an opportunity can be a catalyst for positive change, such as refreshing the team's dynamics or bringing in new talent.

Read also: A crisis is an opportunity for change.

This may seem harsh, but such assessment is common in high-performing engineering teams. Netflix, for example, uses the "keeper test" to determine if an employee's departure would be a loss to the team.

To strengthen our dream team, our managers use a “keeper test” for each of their people: if a team member was leaving for a similar role at another company, would the manager try to keep them? Those who do not pass the keeper test (i.e. their manager would not fight to keep them) are given a generous severance package so we can find someone even better for that position—making an even better dream team. Being on a dream team is the thrill of a professional lifetime, and team members are incredibly supportive of each other. This is why "You make time to help colleagues across Netflix succeed" is a valued behavior.
Source: Netflix Culture

Is this only about money?

Compensation is a complex issue. If a team member receives a significantly higher offer elsewhere, it doesn't automatically mean your pay is unfair. Salary depends on many factors, including the organization's performance or how much a company is willing to pay for talent.

As a first-level manager, you are only a messenger between your teammates and upper management. You can either recommend matching the offer or highlight the risks of not doing so.

Before making a counteroffer, reassess if the employee is someone you'd fight to keep based on the "keeper test." Be cautious about retention negotiations based solely on salary, especially if the employee is demotivated or has a negative attitude toward the company. Money alone won't resolve underlying issues.

Ensure that negotiations lead to a win-win situation where the employee is willing to engage and grow.

Retaining key talent

Assuming it's worth the effort, here’s how you can maximize your chances of successfully retaining a key employee:

Immediate Steps: Understanding the Context

• Open and Empathetic Communication: Initiate an open conversation to understand their reasons for considering leaving. Avoid confrontation and be receptive to their feedback.
• Explore the Core Issues: Determine why they want to leave – is it compensation, work-life balance, career opportunities, or something else?
• Show Recognition and Value: Highlight their contributions and the impact of their work, focusing on outcomes to emphasize the significance of their role.