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A Newsletter from Aura Workforce Analytics on Tech Sector Turnover
Staff turnover in the tech sector continues to outpace other sectors as a result of economic challenges in recent years, with tech giants continuously making headlines with layoff announcements.
In this article, we examined how turnover in the tech sector differs from other industries and conducted multiple deep dives: turnover in the top 10 biggest companies, how exits differ in relation to tenure and gender, and which were the best and worst tech companies in 2023 in terms of staff retention.
The technology sector, a protagonist in an increasingly digitized world, attracts the spotlight regarding staff turnover trends. Leveraging Aura workforce analytics, we analyzed recent staff retention trends in the tech sector, which revealed an intriguing storyline, illuminating specific dynamics and undeniable quirks of the sector's landscape.
An Evolving Tech Turnover Trend
Total Employee Turnover Ratio by Aura Workforce Analytics
From 2019 to 2023, the tech industry's staff turnover trajectory gradually diverged from the norm in other sectors. Initially, the tech turnover rate was only marginally higher, resting at 1.02 times the overall industry standard for two consecutive years. However, 2021 saw a drastic change with the tech industry's turnover rate surging to 1.12 times the average. The gap that emerged continued in the following years, albeit slightly reduced, through 2022 and 2023, at 1.11 and 1.09 respectively.
One interesting trend is the slight reduction in the rate over the past few years, which could indicate either the start of a reversal or a temporary recess.
Tech Sector Outliers and Best Practices
While analyzing the tech sector, which stands out from other industries, we focused on examining the retention rates of various companies within this sector in 2023. Our findings have revealed some intriguing insights.
When looking at the entire tech landscape, we identified companies with the highest share of employee exits relative to their size — lesser-known names like RippleMatch, Jellysmack, and Revature display very high turnover rates.
On the other hand, it is worth noting that some industry veterans, like Xerox, YouTube, and Nvidia, have demonstrated exceptional employee retention performance. Their ability to retain talent in the highly competitive tech industry is a testament to their effective strategies and positive work environments.
And how about the Top Tech Giants?
A unique variance unfolds after examining the top 10 tech corporations' turnover rates. In 2023, we saw staggering turnover rates at Meta and Amazon, standing at 17.5 and 15.7 times the sector average, respectively. The two companies with the lowest relative turnover, Apple and IBM, stood at 7.7 and 7.5 times the sector average, respectively — while still higher than the tech sector average, significantly lower than other companies on the list.
This divergence presents an interesting pattern and could signal differences within the top tech giants themselves. The wide range suggests that a company's position in the industry doesn't necessarily correlate with its staff turnover rate.
Tenure and Gender Under the Lens
When staff turnover is broken down by tenure, it outlines further interesting patterns. Most exits occur among those with ten or more years of experience, with Meta, Microsoft, and Amazon leading with 71%, 66%, and 49%, respectively. This trend challenges the conventional notion of associating higher tenure with better retention.
Coupling this with the gender perspective presents another dimension: males constitute about 61% of exits across top tech firms, which could reflect the tech sector's general gender distribution rather than signal disproportionate staff attrition.
To summarize, this in-depth investigation into the tech sector’s staff turnover reveals that layoffs within the sector continue to occur, more so than in the global economy. This indicates that recent technological advancements in areas such as Generative AI continue to shake up the landscape.
At Aura, we support this type of analysis by making workforce data readily available. This enables the comparison of relevant metrics between cohorts of companies and candidates to develop a deeper understanding of workforce trends and drive meaningful change.
Abylay Jetmekov
Product Manager, Aura
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