Retaining IT skilled staff in small and medium scale software companies in Sri Lanka

Abstract

Retention of skilled employees is one of the most important challenges in companies today. The highest priority for any company is to remain successful. One critical factor to this success is the ability of an organization to not only attract top talent, but to retain those already working within the company. Losing employees can have a significant impact on the company's morale, productivity and overall profit. This research setout to identify the important factors concerned with retaining of IT skilled staff in small and medium scale companies. The research initiated with an in depth literature survey to understand employee motivation and retention. Thereafter, a questionnaire was prepared to capture information on various factors that motivate employee, demographics and turnover intension of employee in another couple of year's time. This study also learned the strategies adopted by these software companies to retain their staff.// From the company interviews it became apparent that the companies did not carryout many specific strategies with the motive of retaining their staff. The results of the employee survey indicated the most important factor was friendly environment or coworker relationship next to keeping up-to-date with technology. It was also evident that the importance of factors varied with each demographic factor of employees such as sex, marital-status and level of IT experience. Research indicated that 47.5% of employees were willing to leave the company for a salary raise less than or equal to40% of their present salary. Results also revealed that 30% of staff had the intension of going to another company in 2 years time; 29% planned to go overseas and only 27%intended to stay with the present company. The identified factors were grouped into five categories and a Category Satisfaction Index (CSI) was formulated and from that an overall Satisfaction Index (SI) of employee derived. A strong correlation (0.76) could be observed between the overall job satisfaction (SI) and the employee's intension of staying in that company in the next two years. A correlation could not be established between the SI and the minimum salary increase expected to leave the present company to another