Minimizing employee turnover in the early days
Employee turnover is inevitable in most working environments. When employees retire, move to be with their family, or decide to go back to school, little can — or should — be done to stop them. But minimising employee turnover is something firmly within the company’s control.
This is particularly relevant to startup teams which are still in the ‘family phase’ where losing critical team members can be costly to progress and overall team morale. Turnover costs are estimated to be about one-fifth of an employee’s annual salary. These costs include: severance pay for the former employee; on-boarding expenses for the new hire; administrative costs for activities such as payroll changes, soliciting new hires, and then interviewing them; expenses incurred from paying overtime to employees who must pick up the slack for the missing employee; and lost productivity while a new person gains experience.
Startups feel these pains strongly. They usually lack the resources of bigger companies to offer large benefit packages and high salaries, which may increase churn if team members are lured in by better offers. Startups also lack brand recognition — when your Twitter feed has millions of followers and your human resource department has scores of dedicated employees, finding new talent isn’t that difficult.
But startups do have some major strengths over larger established companies, which can be used to great effect to minimise employee turnover. Founders need to acknowledge what a startup can offer and double down on the audience interested in that type of working exposure. Simply put, there is a pool of talented applicants who are more attracted to startups than they are to older, larger businesses
How to foster retention in your startup team
1. Engage your team
It’s human nature to want to feel valued and fulfilled (think of Maslow’s hierarchy with self-actualisation and belonging at the top of the pyramid). As a startup, you can show your appreciation for employees with occasional surprises that demonstrate your goodwill, such as holiday gifts and surprise vacations. It’s important to visibly show your gratitude for the work that they are doing. This shows employees that their hard work is appreciated and it creates stronger loyalty to the organization that employs them.
Building culture from day one can help to make your team feel increasingly aligned to the company’s mission and love it as a place to work. Many companies hite a full time “ Happiness” role with the goal of building evangelism in the early team for how great the company is to work at. This reinforces your employer brand in the early days.
2. Foster personal growth and high performance
Performance in any company, whether a startup or not, is driven by engaged employees — that is, people who know their roles in an organization, who understand their purpose, and who view the company mission holistically. Employee engagement promotes the capturing of employees’ creative potential and better decision making.
According to Gallup, employee engagement levels are directly correlated with performance measures. These performances measures include things like productivity, absenteeism, customer ratings, theft and damage.
Your startup team needs to not only love your team’s culture but be consistently challenged at work. Most people attracted to young companies are looking for a high growth environment where they can advance their skills fast. Enabling employees to continue learning and growing can dramatically enhance the meaning they derive from work and their level of engagement with it.
Start by understanding every early employee’s goals and how you can help them achieve those ends in your company. Encouraging employees to explore different focus areas, financially supporting their independent learning endeavors where possible, and frequently checking in with them helps ensure they’re being both challenged and engaged on the job.
3. Offer autonomy
For many team leaders, employee autonomy feels like a leap of faith. After all, you have to trust your employees to let them work from home and exercise flexibility in their jobs without constant supervision. Covid 19 has already challenged this assumption majorly.
The payoffs for employee retention can be profound. Flexibility allows employees to take ownership of their work and their careers, instead of feeling constrained. Not every role or employee will be able to shoulder such responsibility, of course, but when you can find ways to grant your employees a little autonomy, it gives them a powerful and productive sense of control. In fact, that control is something they keep in mind if they ever think of leaving.
Start small, if need be, by allowing employees to choose their in-office hours or letting them work one day every month on special projects of their own choosing. That may be the very thing that keeps them from moving on.
4. Promote company bonding.
When people form connections and build friendships with one another at work, they are inherently less likely to leave. Switching to a new job carries a cost to them — the cost of starting over from an interpersonal or social perspective.
Invest in culture!! You can promote company bonding with office activities like bringing in a ping pong table, forming recreational sports teams, and sponsoring meals or drinks out between company employees, to name just a few ideas.
Putting effort into employee bonding leads to happier and more productive workers. This is particularly important at the early family stage of your team where every relationship counts. Help your team enjoy the work environment more, by helping surround them with others they enjoy.