A Software Engineer's Job Satisfaction Is About More Than Just High Pay

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If you want to keep your engineering employees, it’s not enough to just offer good pay. You also need to create an environment that supports their growth and development.

Software engineers are expensive. With the demand for engineers with experience in cutting-edge technologies like full stack web engineering, blockchain, augmented reality (AR), and artificial intelligence (AI), offering salaries at or above the going market rate is essential to attracting and retaining top talent.

A common approach for businesses, especially if they are in a good financial position, is to offer salaries way above the market rate. Another possible solution is to offer them incentives like stock options, bonuses and similar ones. Gym memberships or free lunch are also good ways to motivate your employees.

I have observed all of these methods being used in one way or another, and I can say from experience that they all eventually fail to retain staff. Of course, these strategies might initially bring in some talent. However, they will not be the main reason why your team will stay with you in the long run.

If that is not enough, this "special treatment" towards engineers can create resentment throughout the company. Negativity has a negative impact on performance and employee retention. If you do not retain engineers, not only are you wasting money, but you are also negatively impacting other areas of your organization.

The root cause of this problem is likely a misunderstanding of the engineer's character. It is possible that this is caused by the fact that their occupation is unusual and requires them to change complex theories into interactive pixels on either a phone or laptop. What is the average engineer really like? By understanding what motivates them, we can begin to answer this question and have a better understanding of software engineers. Consequently, operating from that place of understanding, you’ll likely have better luck attracting and retaining talent.

I have been an engineer for many years, and I have observed that there is often a disconnect between engineers and the rest of the business.

Software engineering is a complex art, and often invisible dependencies between components can make or break an application. It is no wonder that the best engineers are often both revered and despised, and that their work is considered a necessary evil for the business to go on.

In actuality, engineers are individuals like everybody else. Maybe we have a tendency to be more introverted than most, but that is often because of the character of our work. Coding necessitates a lot of focus and concentration, so it is best done by oneself. You need to be dedicated and put in the hours, which is often done in front of a monitor in a quiet space. The journey isn't anything special. To become an engineer, one must be dedicated, analytical, curious, and good at problem solving.

If an engineer is not a supernatural being, you will not need magic to attract them or keep them once they are on board. You just need to talk about their interests and offer appropriate rewards. You might offer to buy the newest iPhone or Android device for your engineers annually on a “yours to keep” basis. Not only is this a nice perk, but it also encourages experimentation with the latest and greatest technology.

These benefits come with a significant cost. You might be tempted to ask: Would it be better to offer more money, or perhaps a higher bonus? If I'm spending more money anyway, why not put it directly into the pockets of the engineers? This is not a valid retention strategy. To understand why, we need to explore the psychology of linking performance with rewards, particularly for highly skilled employees.

Performance and Reward

Rewarding better performance with money is a common management axiom that largely went unchallenged until the late '00s.

The authors of "Large Stakes and Big Mistakes" showed that, for the most part, tying monetary rewards to performance doesn't lead to better output for highly skilled work that involves complex cognitive skills and creative thinking. The high reward at the end of the activity becomes a focal point for the entire job, and that structure leads to worse decisions overall along the way.

Studies conducted in this area have also looked at the relationship between higher salaries and employee motivation and satisfaction. The results here were more mixed, as summarized in this Harvard Business Review article. Generally, it was indicated that money alone is not sufficient motivation for the highly skilled employee.

According to the most comprehensive study on the topic, workers who choose to stay in their jobs are not motivated primarily by money. In other words, once a person’s basic financial needs are met, money becomes less relevant as a criterion for job satisfaction, especially when compared to factors such as purpose, self-improvement and self-direction.

Companies paying 20-30% above market rate have little impact on staff retention. Although it may not be worth the investment, stretching retention slightly could net a better result than if you don't. However, keeping your engineers engaged and motivated will have an even more substantial difference. Let's explore how to do that next.

Engineering Motivation

The best engineers are those who are able to take on a challenge and turn it into reality, no matter how impossible it may seem. For many engineers, the goal is to optimize existing systems for better performance, while others may prefer to create new software altogether. Some groups excel in creating automation, such as ensuring the seamless roll-out of new versions of a product. The best engineers want to be excellent in their art, whether it is through going narrow and deep into a specialization or by going shallow and wide across the various disciplines of software engineering.

Most importantly, the manager should respect the art of software engineering, allowing for sensible timeframes for software development and not skimping on quality.

Even if the company has a solid structure in place, the work may not be exciting for the team. For example, a company may have to maintain a legacy product while also developing the next great innovation. In a situation where most engineers want to work on a newer product but the older product still needs attention because it is the main source of revenue for the company, what can a manager do?

She cannot categorically reject any work that the team doesn’t like doing. That would be unrealistic for any business. However, she can strike a balance between less appealing work and more interesting tasks at hand. For example, she can rotate engineers between the two projects every sprint or so, or, at the very least, ensure that the team that’s working on the legacy system participates in the design of the new one. Additionally, she can assist the engineers working on the less interesting project to understand how the knowledge they are obtaining is beneficial to their professional development.

If you want to retain your team, the manager needs to have a thorough understanding of each team member’s goals and objectives.

If the work at hand does not offer any opportunity to develop the team's goals, a review of the operations model might be needed. One possibility could be to introduce research projects that are self-directed and more open-ended. These projects would be focused on generating innovative ideas that can be implemented into the company's products at a later time, rather than immediate results.

The most important thing to remember is that a good working environment is more important for retaining engineers than a high pay scheme. It provides an environment where engineers can grow and perfect their craft, using their brain power while satisfying their natural curiosity.

Parting Thoughts

Hiring and retaining engineers is more about offering an environment that is engineering-positive than it is about beating the competition on salary and perks.

When looking to hire engineers, it is important to discuss the opportunities your company offers for learning and growth, as well as the unique aspects of your technology. This will make it easier to negotiate salaries and benefits.

When it is not possible to allow your engineers to choose what they work on, make sure to rotate personnel between run-of-the-mill tasks and more interesting work.

Although this strategy won't get rid of all competition for the best employees or ensure that they stay with the company forever, it is still worth considering. A company culture that is positive towards engineering will result in offers being based on a strong, positive foundation, instead of relying on random perks which could end up doing more harm than good in the long run.