At industrial companies today, software now defines and enables the customer experience. The automotive industry is seeing a major transformation in this regard, where software development is quickly becoming both the new core competency as well as the market differentiator. From sensors and controls that make a car perform better to remote access to navigation, music, and personalization options, software is behind virtually every aspect of the vehicle.

That’s why it’s so important that industrial companies level up their ability to attract and retain world-class software development engineers. 

Here are 3 things industrial companies need to get right:

Understand their value:

If you want to attract top software talent, the total compensation package needs to be competitive with the tech sector, period. The game has changed.  Industrial companies are no longer just competing with one another for talent. They are competing with tech companies like Google, Apple, Tesla, and Amazon. 

“Industrial companies are no longer just competing with one another for talent. They are competing with tech companies like Google, Apple, Tesla, and Amazon”

As they enter the digital arena, industrial companies tend to under-value the new software roles they are creating because they benchmark them relative to internal equity vs. the high-tech market. In industrial enterprises, management and traditional engineering roles have always been valued at a premium, and their compensation structures reflect this. But companies are learning that the differentiating skill sets have changed, and software roles are replacing those legacy skills in the value chain. Software and high-tech roles are commanding a premium. This is particularly true in the case of senior technical individual contributors and thought leaders who can command compensation packages equivalent to (or higher than) that of their management and leadership counterparts. 

Often, industrial companies struggle to reconcile high-tech salaries with their internal equity constraints and can end up “under-hiring” for these crucial roles. This can lead to the dilemma of quantity substituting for quality. Hiring a few world-class software engineers capable of delivering a robust architecture and clear technical requirements often results in clear epics that can be efficiently coded and delivered through much smaller teams, with reduced down-stream support requirements. Conversely, suboptimized architectures may require larger teams to develop, integrate, and thread features and experiences together, which can lead to a decreased customer experience. That’s why it’s worth understanding the market and investing in the people who will make the biggest impact. 

Create an appealing environment:

Industrial companies need to be intentional about curating the kind of environment where world-class technical talent wants to work. Provide an environment that reflects the future and energizes and inspires your developers. Tech is not static, and the rate of change is accelerating rapidly. Software engineers can’t afford to get stuck working in old technologies or methodologies or they risk losing relevance. This means that companies need to adopt new thinking, adopt new ways of working, and operate with new technologies and practices. Legacy industrial cultures tend to be process-driven and can feel bureaucratic, which offers a very different experience from the innovative engineering cultures they are used to. This does not mean that industrial companies need wholesale transformation of their culture, but it is essential that they are flexible and enable software teams to work like industry teams. They need to make it easy for software engineers to do their best work.  Eliminate heavy process burdens—because top talent won’t put up with it. Focus on removing friction and bureaucracy so your talent can focus on the important work. Get out of the way.  Empower teams with a clear mission and let them execute. Developers want the space to innovate and run with ideas. They should be empowered to spend the vast majority of their time doing what they’re best at—writing code and architecting solutions. If they get bogged down with other work, such as process documentation or other paperwork, your job not only becomes less appealing to them, but the company gets much less value out of them.  

All paths should not lead to management:

The vast majority of corporate career paths advance through the management ranks. This is a puzzling reality, given that the skill set for successfully leading and developing people is often much different from the skill sets that get people into management roles in the first place. 

To retain top talent in tech, companies need to have individual contributor tracks where employees can deliver technical contribution and thought leadership and progress from entry level to the most senior levels without having to manage teams

To retain top talent in tech, companies need to have individual contributor tracks where employees can deliver technical contribution and thought leadership and progress from entry level to the most senior levels without having to manage teams. These career paths need to be highly visible, utilized, and valued alongside the traditional tracks that lead to management. In industrial companies, implementing this model usually requires some reworking of the org chart and drawing new types of branches. This can feel uncomfortable, and it’s likely to garner pushback from some senior leaders. But it’s how the world’s most successful tech companies retain top talent, and it’s worth following their lead.   

Being successful at attracting and retaining top technical talent starts with understanding what your talent really cares about and creating an environment and experience that is worth staying for. This starts with designing an intentional experience for the full talent-management life cycle. It doesn’t end with the hire. You need to coach, develop, advance, and re-recruit your people in a continuous, fluid experience. It also means parting with traditional advancement-hierarchy thinking. Most developers don’t want to become managers. They want to do exciting and novel things. They want more contribution, impact, and innovation—not more meetings and administration. You need to offer compelling career paths for IC engineers with opportunity to grow through the most senior levels. If they can’t grow with you, they go somewhere else.

A final thought: in the age of remote work practices, talent has become hyper-mobile. This is great for industrial companies because it opens access to talent markets by being location agnostic, enables formation of distributed teams, and has the potential to reduce hiring costs such as relocation benefits. However, being able to work remotely has made it even easier for talent to leave for growth opportunities or better offers since geography is no longer a barrier to movement. Paying attention to the overall employee experience and value proposition you offer is critical. With compensation being equal, high-tech talent will look at these other elements of culture, environment, and career development as key differentiators.

Attracting and retaining high-tech talent in a non-high-tech environment can be difficult, but these three tips will go a long way. As you make progress in bringing on more top talent, it will only make it easier to continue fleshing out your team. Like every line of business, software developers want to work with and learn from great people. Hiring brilliant developers is often the best way to attract more of the same.  

Brenda Zinkan has more than 25 years of HR, talent management, and business transformation experience in the high-tech sector. She has deep experience in automotive and aerospace software team organization at clients including Lockheed Martin, SpaceX, Ford, and Tesla.