In 2020 and into the first half of 2021, as the pandemic disrupted markets, communities and economies, many tech companies moved decisively toward a new normal. Whether through virtual business operations, digital workplaces or a productive, distributed workforce — innovative tech companies have continued to lead and transform the industry.

According to Mercer’s 2021 Global Talent Trends research, the #1 investment area in 2021 for tech employers was energizing the employee experience, which was 2.1x higher than the all industry average, and the #2 investment area was defining future workforce needs.  Not surprisingly, a hallmark of the most innovative tech companies is that they place extraordinary pressures on employee experience and people programs. In our observation, the single biggest differentiator between innovative and non-innovative organizations was their focus on designing an employee experience and capabilities/programs for the future workforce.

Mercer’s Building Innovation-Driven Tech Workplaces (ITWs) research identifies key workplace factors differentiating the most innovative, people-oriented technology organizations from the rest. Our 2020-21 ITW research, explored five dimensions that set ITWs apart from the rest of tech. These dimensions were established in our 2019 study, and this research confirms and broadens our understanding of how ITW workplaces create a different employee experience.

Focus on customer needs

• ITWs create a vision and culture laser-focused on the customer — what matters most is understanding and meeting customers’ needs.
• ITW leaders unify their organizations around their customer visions to respond swiftly to changes in customer behaviors and expectations.

Iterate through small bets

• ITWs emphasize working through experimentation and embracing failures as an inherent element of innovation.
• ITW business leaders empower individuals and teams to own the quality of their work through the design-build-assess cycle.

Provide psychological safety

• ITW leaders actively encourage teams and individuals to work on innovative projects, which can be risky.
• They do so by allocating resources to these projects, creating a receptive environment for employees to explore their interests and protecting them when innovative projects fail.

Hybrid skills and learning experiences — Empowering employees to own their learning

Encourage new perspectives

• ITWs actively work to cultivate a culture where different perspectives are encouraged and curiosity can thrive.
• By linking continuous learning to changes in perspective, ITW leaders encourage challenging the status quo.

Democratize learning

• The democratization of learning ensures that resources are readily accessible to the entire workforce.
• Through strong learning infrastructures, an emphasis on employee choice and the use of AI to recommend skill-development opportunities, ITWs build an environment that recognizes and nurtures different learning styles.

Build next-generation skills

• Technology and digital skills are constantly evolving; ITWs understand that many new capabilities must be built and learned “on the job”, as opposed to more formalized delivery methods (e.g., classroom-based, instructor-led)
• ITW engineering and product leaders emphasize that “work” needs to shift from completing tasks to solving problems and improving interactions.

Inclusive people programs and processes — Creating a differentiated employee experience

Reward choice

• ITWs recognize that an innovative workforce is a highly mobile workforce and retention is key.
• To attract the best and brightest tech talent, ITWs ensure that career experiences and rewards are geared toward providing employees with the freedom to choose — whether they’re exploring benefits, career/talent management or flexibility.

Supercharge inclusion

• Inclusion emerged as a key design principle at ITWs for people processes and programs.
• ITWs are prioritizing a few key areas — first, improving diversity representation at the leadership level; second, ensuring a distributed ownership around inclusion; and finally, creating inclusive benefits for all.

Prioritize HR service over process

• HR teams at ITWs work closely with the business, creating a greater balance between central teams (COEs) and business teams (HRBPs).
• ITWs also prioritize certain value drivers in their HR functions — applying a “product” mindset to program design, driving high-touch interactions with employees and prioritizing service over process.

Flexible organizational architectures — Maintaining a startup mindset

Design for collaboration

• Employees in ITWs overwhelmingly believe the workplace enables them to work across organizational boundaries and that they benefit from the organization’s collective cognitive capital.
• ITWs are more likely to have a strong focus on cross-functional collaboration through their work practices, such as talent rotation across projects and functions.

Promote extreme ownership

• In their quest to build an inclusive, high-trust culture, ITWs enable decision-making across the organization, especially at early career and nonmanagerial levels.
• They do this by decentralizing operations, creating flat structures, and ensuring flexibility and transparency around goal-setting.

Design agile structures and roles

• To a degree, ITWs encourage lack of structure within their organizations; they consider it important to enable them to move quickly and to generate a healthy tolerance for risk and ambiguity.
• ITWs take a “light touch” approach to business processes, keeping formality at a minimum to maintain focus on outcomes, promote agility and localize workflows as needed.

Digital workplaces — Powering people and business performance

Become digital by choice

• Employees in ITWs have access to top-of-the-line personal computing tools, enterprise productivity applications and remote collaboration capabilities.
• In addition to investing in innovative technologies to build better products, ITWs view technology as an essential productivity and performance lever, not a perk.

Empower virtual, distributed teams

• For the second year in a row, we observed ITWs embracing virtual working in concrete ways — including forming teams with geographically distributed members, robust collaboration tools, remote work policies and more.
• ITWs are increasingly focused on “virtual” behaviors, such as asynchronous engagement and greater autonomy.

Enable information access and transparency

• ITWs recognize that the free flow of information is critical to maintaining transparency and an open culture.
• They reinforce the “default-to-trust” principle for information-sharing: building secure, open systems that provide direct access to business and employee information.

Case study

An ITW’s journey toward becoming an employer of choice for women in tech

One ITW we interviewed felt that women were underrepresented — not only in their organizations but also in the tech industry as a whole — and the leadership team wanted to do something about it. To address the missed opportunity, the firm wanted to become a talent magnet for women by creating an inclusive workplace with strong opportunities to gain and develop technical skills.
The company did this by:

• Crafting an inclusive diversity statement that would attract women and clearly articulated what the company stood for
• Reducing unconscious bias through organizational education and by highlighting the value of diverse perspectives in the innovation process
• Evolving its employee value proposition to be more inclusive of the wants and needs of female employees
• Engaging the market, presenting at external forums and local women’s professional groups to highlight opportunities for women in tech

The company soon noticed an overall uptick in interest from prospective employees, not just from women. The firm also realized productivity gains across the organization, which it attributed to a more inclusive workforce and diverse points of view. This resulted in novel ideas on how to refine legacy business processes and net-new products and services. Increased female representation also propelled other diversity initiatives, creating opportunities to expand the representation and participation of nontraditional tech talent, such as workers with disabilities, former military members and others.

ITWs are designed for uncertain times. ITWs have built risk-friendly cultures, encourage continuous learning, create people programs that focus on employee experience, simplify organizational structures, and create transparent, digital workplaces. These attributes serve ITWs exceptionally well in the remote, digital workplace. As evidenced by business results, these technology companies have continued to grow, innovate and outperform the industry.