High employee turnover rates can be part and parcel of life as a startup. Employees can often come and go as your endeavor finds its feet and you discover how to function in your desired market. If you’re suffering from exceptionally poor retention rates, there could be a number of reasons behind the fickleness of your staff.
What can spark these problematic levels of attrition? It could be down to matters of money, stability, or expectation, but there are many ways in which your actions could impact whether a worker decides to move on.
It’s also important to acknowledge the statistics that separate startups from more mature businesses when it comes to staff turnover. The attrition rates in startups are around 25%, which is nearly double the U.S. national average at just 13%.
High turnover can be especially difficult for startups to overcome because of the sheer volume of time and resources that are required to hire new talent and to train them up within their roles. Time certainly means money when it comes to startups, and with an average employee turnover of two years, this can be a major problem in forward-thinking businesses.
Fortunately, there are many ways in which you can limit the level of turnover your startup experiences. To better understand the actions that can be taken, let’s take a look at some of the leading reasons why you may be losing employees at a quicker rate.
1. Your Employees Don’t see a Future in Your Startup
When employees join a startup, they’re likely to feel a little less secure in their long-term future due to the difficulty that many companies face in their early stages. With most endeavors failing to make it beyond a decade, few staff members will believe that they’re joining your company for life, but there are a few steps that you can take to bring them some all-important security.
Here, your most important challenge is to ensure that you’re transparent about your long-term ambitions for the company, and share some of your core findings within your business plan to ensure that new recruits are fully aware of your long-term viability.
2. Your Recruitment Processes are a Little Rusty
If you’re experiencing higher-than-usual turnover rates, it could well boil down to a flawed hiring process. You may be onboarding talented individuals, but they might not be the perfect fit for your business.
To remedy this, be sure to look more at your company culture, and identify applicants that have personality traits that are consistent with existing personnel. If you take on contractors, be sure to outline your expectations for the job at the start to avoid confusion further down the line.
3. You’re Failing to Nurture Your Employees’ Talents
When it comes to managing startups and getting the most out of your staff, it’s important to discover the value of your employees by identifying all of their skills and nurturing their talents.
With platforms like Strengthsfinder from Gallup, it’s possible to help your staff to learn about their strongest skills and competencies. This can help you to mold better progression paths and ensure they can play a stronger role in making the company as a whole more productive.
Likewise, it’s essential that you continue to build on existing skills through more immersive and engaging training techniques. With more businesses embracing the VR training as a means of adopting a reusable technology that can help to accelerate the development of competencies and soft skills for a wide range of job roles.
This type of training can also help new employees to practice more high-risk jobs in roles related to healthcare or operating complex machinery.
Through automated and personalized training programs, managers will be capable of allocating work according to the strengths of individuals to help increase productivity with less chance of workers feeling incapable of performing.
4. You Aren’t Incentivizing Your Staff Accordingly
Startups often operate on tighter purse strings, and rightly so. But offering incentives like equity refreshes in return for high performance and loyalty can be highly valuable in preventing costly instances of employee turnover.
Look to implement programs that offer a greater degree of holiday time for longer serving employees and a suitable bonus scheme based on tangible results.
5. Your Management Team Isn’t up to Scratch
Weak management teams can be a leading cause of failure in startups as a whole–and is a problem that can transcend matters of employee turnover.
As well as making poor business decisions in the development and marketing of products, weak managers are likely to build dysfunctional teams below them. Even if you follow your recruitment processes to the letter, it can be impossible to get your workers to collaborate and perform to the best of their ability.
If they’re also poor at communication, it can lead to employees feeling unfulfilled and more likely to look to other opportunities in order to perform to the best of their ability.
6. You’re Lying to Your Workers
This can be a major cause of turnover, and is a deceitful habit that many businesses can engage in.
Never over-promise to your employees, and always allocate time for a little self-reflection. If you claim to promote a healthy work-life balance, never undermine it by encouraging personnel to take their work home with them or to hand them unrealistic deadlines.
Likewise, it’s important to avoid claiming that you’re offering career progression that simply doesn’t exist, or that your financial projections are better than they are. If an employee loses trust in the things you say, they’ll be less likely to listen to your motivational words and accept recognition for the tasks they perform well.
Although there are many ways in which a startup can fail to appropriately manage their turnover rates, there are lots of measures that can be taken to retain talent and to avoid costly onboarding processes of new employees at regular intervals.
By caring for your employees on an individual basis and listening to their needs, you can create a workplace that’s enjoyable to be a part of. In those delicate early years of life as a startup, a little TLC for your teams can go a long way.