The data is out: How to retain developers during a tech hiring slowdown

It’s a rocky time for the tech industry. In a time of shrinking hiring budgets , retention of your top developer talent matters more than ever. Backed by data from our recent reports on hiring trends in Europe and South Africa, and with input from employers winning at retention, here are the four factors that make the biggest difference in whether developers stay in their roles or not.

How to retain developers during a tech hiring slowdown

Why developer retention matters even more in a hiring slowdown

After the tech boom during the Covid-19 pandemic, many tech companies scaled rapidly. But now the tech industry has experienced a cool down from historic highs.

For many businesses, including Big Tech companies like Meta, Twitter and Amazon, business profitability has failed to keep up with growth. As a result, many of these companies are now struggling to raise capital and implementing layoffs. As a whole, the industry has shifted its focus from ‘growth at all costs’ to ‘capital-efficient growth’.

Hiring teams are feeling the bite of a downturn in the tech hiring market — for example, in 2022, 7.4% of European developers reported being retrenched.

If your hiring budget has shrunk as a result of the downturn in the tech market, retaining your top developer talent matters more than ever. With a reduced budget, it becomes even harder to find new members, which impacts your bottom line.

Let’s deep-dive into the top reasons developers leave for new opportunities, and what you can do to improve your retention rates.

Top factors that drive developers to leave — and what helps them stay

In OfferZen’s Developer Hiring Reports, we asked developers about their reasons for leaving a role. In both Europe and South Africa, the top three reasons are the same. Developers overwhelmingly leave:

To get better salaries
To escape poor management
For better work-life balance

It’s not hard to see why better salaries top the list: Most developers get an increase of more than 10% when they switch jobs, with 1 in 8 even getting a whopping 50% increase. Investing in competitive salary packages for your current team is therefore first prize for retaining talent.

If big increases aren't currently possible for your team, it's vital to look at the other factors developers care about. What matters most to help developers stay in their roles? Good work-life balance, growth opportunities, and great company culture. These are the top three factors in South Africa.

In our previous Netherlands report, the same factors reign, with the addition of great colleagues making a difference in developer retention rates.

How to improve your developer retention rates

With the above factors in mind, here’s our top tips and resources to help developers stay in their roles for longer:

Promoting a good work-life balance

Since the pandemic, developers have spent more time with their families in remote work set-ups, and also experienced the blurring of work and personal boundaries.

To improve work-life balance, make sure you invest in a remote work policy that resonates with developers.

Developers tend to prefer remote options, and are split between fully remote and hybrid options in South Africa and Europe. At the same time, developers value face-time with their colleagues and a lack of day-to-day in-person interaction is their top remote work struggle.

A possible solution is to offer your developers optional office or co-working spaces. Providing a space for your team to connect addresses a major pain point for developers and gives you the freedom to hire broadly, for both hybrid and fully remote roles.

What would make an office space a more appealing place to work? We asked our developer community for input: Check out their recommendations here. For more insights, check out our blog post on the top strategies to promote work-life balance.

Provide your team with growth opportunities

Challenging projects, good earning potential and mentorship are the defining factors of career growth in Europe and the Netherlands. Getting these factors in place can make all the difference for your team.

One company that has achieved good developer retention rates through career opportunities is Klar. At Klar, they provide developers with continuous learning programs, cross-functional collaboration, mentorship, challenging projects, and recognition of their contributions:

“We prioritise the growth of our developers by encouraging them to expand their skills within their roles without imposing boundaries. Our aim is to create a thriving and fulfilling environment for our developers, where they have the freedom to explore new technologies and responsibilities,” says Frank Birzle, Co-founder of Klar.

“Our conviction in providing growth opportunities for our developers stems from the collective experience of our co-founding team. Two-thirds of our team have previously worked both as developers and in various IT management positions. Drawing from this firsthand experience, we have learned that the approach of encouraging developers to expand their skills without rigid boundaries is the most effective way to build trust in their capabilities.

We understand that developers possess unique expertise and contributions, and by empowering them to take on diverse responsibilities, we foster an environment of trust, where their potential can flourish.

We are proud to share that we have achieved an almost 0 percent churn rate within our team. Our developers appreciate the trust and autonomy they are given, allowing them to explore their interests and take on new responsibilities within their roles.”

Additional resources to help you retain developers

Check out some of our top resources on some of the other main reasons that developers stay in a role:

Creating a great company culture

Daily Habits You Can Start Now to Nurture a Culture of Diversity
Top Insights: Talking Culture with Tech CEOs
Want to know how developers assess your culture?

Check out the data for Europe and South Africa: Speaking to existing or past employees, your interview process as well as word of mouth are the key factors for both regions.

Providing good management

We asked our community of software engineers to share their thoughts on good and bad management in tech, so you know what to watch out for: Software Developers Leave Bad Managers – Here's What to Avoid and Do Instead.