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Smaller but more-frequent promotions are key to minimising the high turnover of IT professionals, says Alain Pinsonneault of McGill University’s Desautels Faculty of Management.

IT professionals are far less likely to leave a company when their chances of promotion are higher, yet businesses cut back on these to avoid the costs of large salary increases. Therefore, smaller but more frequent promotions increase employee retention whilst keeping costs low.

The research, co-authored by Frank MacCrory of Fordham University’s Gabelli School of Business, and Vidyanand Choudhary of the University of California’s Irvine’s Merage School of Business, analysed 5,704 IT professionals at a North American-based systems-integration and consulting firm with offices in over 100 cities in four continents. The data was drawn from HR records over a five year period from 2005 to 2010.

Pinsonneault says: “A key factor in the retention of IT professionals is creating a ‘promotion ladder’ within a firm. This allows for employees to aim for smaller, more frequent promotions, and spares many from the dissatisfaction of losing out on the larger financial benefits of elusive, coveted promotions – a shock which is likely to push them to move on from the company. This can be accomplished either through marginal adjustments to existing jobs or by inserting new levels into the job ladder.”

“For businesses wishing to decrease staff turnover without affecting their profit, offering other benefits at each step on the ladder can be seen as a small investment into avoiding the high costs of replacing employees. Take, for example, the SAS Institute’s retention strategy of spending $6,000 to $8,000 on perks per employee to prevent $50 to $70 million in replacement costs.”

The researchers add that industries with low turnover rates are better served by motivating employees with large but infrequent promotions.

For more information, a copy of the study, or to speak to Professor Pinsonneault, contact Natalie Bishop at BlueSky PR on natalie@bluesky-pr.com or call +44 (0)1582 790 709.

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