India’s IT industry has an average attrition rate of 21-25%. For mid-level engineers with 3-7 years of experience, it spikes to 30%+. Every departure costs the company 50-200% of the employee’s annual salary in recruitment, onboarding, lost productivity, and knowledge drain. Yet most companies respond to this with superficial perks — bean bags, free lunches, and “fun Fridays” — rather than addressing the structural reasons people leave.
Here are five retention strategies backed by data and real-world results.
Strategy 1: Fix the Manager, Fix the Attrition
The data is unambiguous: people do not leave companies; they leave managers. Gallup’s global research found that the manager accounts for 70% of the variance in employee engagement. In our own placement follow-ups, “poor relationship with direct manager” is the number one reason cited by professionals who leave within 18 months.
What to do:
- Invest in management training. Most engineering managers are promoted for technical excellence and receive zero training in people management. Budget for leadership development — coaching, feedback skills, conflict resolution, and career development conversations.
- Measure management quality. Run quarterly anonymous feedback surveys where direct reports rate their managers on 5-7 specific behaviours. Make this data visible to skip-level leaders.
- Act on bad management. When a manager consistently receives poor feedback, provide coaching. If coaching does not work, move them to an individual contributor role. One bad manager can trigger a cascade of resignations.
- Create skip-level connections. Ensure every engineer has a relationship with their manager’s manager. This provides a safety net and an alternative perspective.
Strategy 2: Create Visible Career Paths
The second most common reason for attrition in IT: “I did not see a future here.” When engineers cannot visualise their next 2-3 career moves within your organization, they start looking outside.
What to do:
- Define dual career tracks. Not every senior engineer wants to manage people. Create clear, equally prestigious tracks for individual contributors (Staff Engineer, Principal Engineer, Distinguished Engineer) and people managers (Engineering Manager, Senior EM, Director).
- Publish level expectations. Write down exactly what is expected at each level — technical scope, influence, collaboration, and leadership. Make this public to the entire engineering team.
- Conduct career development conversations quarterly. Not performance reviews — career conversations. Ask: “Where do you want to be in 2 years? What skills do you need? How can I help you get there?” This is also why hiring for cultural fit matters — employees who align with team values are far more likely to stay.
- Fund skill development. Provide an annual learning budget (1-2 LPA per engineer) for courses, conferences, certifications, and side projects. Engineers who are growing are engineers who are staying.
Strategy 3: Pay Fairly and Transparently
Salary is rarely the primary reason people leave, but it is frequently the catalyst. An engineer who is satisfied with their work will start job hunting the moment they discover they are paid 20% below market.
What to do:
- Benchmark annually. Review your salary bands against current market data every 12 months. The IT salary market moves fast — bands that were competitive 18 months ago may be stale today.
- Correct pay inequities proactively. Do not wait for employees to bring offers from other companies. Run an annual pay equity analysis and bring underpaid employees to band without them having to ask.
- Be transparent about compensation philosophy. Explain how salaries are determined, what factors influence raises, and what the band ranges are for each level. Transparency builds trust.
- Make counter-offers unnecessary. If your compensation is fair and your employees know it, counter-offers from other companies have less power. When you find yourself making counter-offers frequently, your compensation structure is broken.
When you do hire, ensure your new hires are calibrated correctly against the existing team. Our permanent staffing practice includes salary benchmarking as part of every engagement to help you make competitive offers without overpaying.
Strategy 4: Eliminate Meaningless Work
Engineers are craftspeople. They derive deep satisfaction from solving hard problems, building elegant systems, and seeing their work make an impact. They derive deep frustration from bureaucracy, busy work, and features that no one uses.
What to do:
- Kill low-impact projects ruthlessly. If a project does not have a clear user or business outcome, cancel it. Engineers know when they are building something no one will use, and it drains their motivation.
- Reduce meeting load. Audit every recurring meeting. If it does not have a clear agenda, decision to be made, or information that cannot be shared asynchronously, cancel it. Most engineering teams can recover 5-10 hours per week per person.
- Automate toil. If engineers are spending time on repetitive manual tasks (deployments, environment setup, data migrations), invest in automation. The ROI is both operational and motivational.
- Connect work to impact. Share usage metrics, customer feedback, and business outcomes for the features your team builds. Engineers who see the impact of their work are significantly more engaged.
Strategy 5: Build Genuine Community
Remote and hybrid work has made this harder but more important. Engineers who feel connected to their team and proud of their company culture are dramatically less likely to leave for a 20% salary bump.
What to do:
- Invest in team rituals. Regular hackathons, tech talks, architecture review sessions, and team off-sites create shared experiences and social bonds that job boards cannot compete with.
- Celebrate wins publicly. When a team ships something significant, celebrate it company-wide. Not with pizza — with genuine recognition from leadership about what was achieved and why it matters.
- Create cross-team connections. Engineers who only know their immediate team are more likely to leave than those with relationships across the organization. Facilitate cross-team projects, guilds, and interest groups.
- Be authentic about challenges. Teams that pretend everything is great lose credibility. Be honest about company challenges, solicit input on solutions, and follow through on commitments.
The Retention Math
Here is the business case for investing in retention:
- Average cost to replace a mid-level engineer: 8-12 LPA (recruitment, onboarding, lost productivity, knowledge transfer)
- Average retention program cost per engineer per year: 1-2 LPA (career development, learning budgets, compensation adjustments, team events)
- ROI: 4-6x return for every rupee invested in retention over recruitment
The best recruitment strategy is a strong retention strategy. Keep the people you have, grow them into the leaders you need, and reserve your recruitment budget for strategic additions rather than attrition backfills. And when you do hire, a strong onboarding process ensures new team members stick around.
Related Reading
- Why Cultural Fit Matters More Than Technical Skills — How hiring for alignment reduces attrition before it starts
- Employee Onboarding Best Practices for IT Hires — The first 90 days determine whether your new hire stays or starts looking
- Permanent Staffing — Cultural-fit hiring with a 60-day replacement guarantee
