Reasons as to why you have high employee turnover in your tech-based startup – By Saumya Bhatnagar
Startups are notorious for having a high employee turnover rate, especially tech-based ones. It is often challenging for the HR department to retain and engage existing employees. In spite of their efforts, the process of turnover does not exactly cease.
I have quite some time charting out the hiring criteria at my startup, and preventing employee turnover is one of the key attributes I took into consideration. Besides, the exhausting task of screening potential employees, re-hiring, and interviewing, replacing employees takes a lot of time and effort. I observe it costs around three times an employee’s salary to replace them. This cost comprises of recruitment and loss of productivity.
According to the SHRM study, when a company replaces a salaried employee, it costs around six to nine months’ salary on average. Thus it is crucial to make a retention plan right from the beginning. To reduce employee turnover, it is essential to understand why your employees wish to leave your organization at some point.
Generally, startup employees have 5 reasons for leaving. Luckily, almost all of them are preventable. Here they are:
Lack of Faith
Most tech-based professionals focus on building a long-term career. If they feel your startup doesn’t have long-term potential, they will surely start searching for stability and security. To prevent this, work hard to prove your staff the potential of your startup to succeed.
Progress has to be made in order to instill a sense of dedication in your employees, they have to be willing to put their best effort in, and be as passionate as you are about the company, only then will they stick.
Better Offer
Sometimes employees look for better job opportunities, pay, benefits, and fewer working hours. You can’t blame an employee for choosing a better deal; instead, you can make your offer better.
According to a study, 37% of employees claim that they would leave their current job if they were not offered certain perks. So, even if you don’t have the money to retain them, you may offer intangible perks like flexible hours, work from home, volunteer time off, or a sweet office setup.
Stress in The Workplace
Most startups are under pressure to succeed. Everyone, from the founder to partners to investors are anxious to see things take off, resulting in tight deadlines, and long hours for employees. Though some employees succeed in working inside the pressure cooker, for the others, even a little work is too much to manage. Which is a bad sign.
A report from the American Institute of Stress reveals that 40% of workers reported their job was exceedingly stressful.
If such situations persist for too long, you may start noticing resignations. To prevent this from happening, you can take certain measures, such as bringing in snacks from time-to-time, if your building is pet-friendly, having an office dog or cat surprisingly proves to be very effective in reducing stress.
Not Being Able To Fit In
Contrary to large companies, where employees usually surrounded by a cubicle, at a startup, you work in close quarters. If an employee doesn’t fit well within this culture, it may create a feeling of not belonging.
To avoid it, set up a consistent culture right from the beginning and hire people who fit into that culture. As an added measure, you should receive feedback from your employees about the work culture.
Personal Issues
Sometimes, personal crises make employees quit. Personal issues are impossible to prevent, especially if they are significant. All you can do is, offer more flexible hours, work-from-home opportunities; or even extended leaves in extreme circumstances.
Regardless of what you do, you will experience some amount of employee turnover for sure. Personal issues will occur, and some workers will leave for almost no reason. What you can do is create a culture that naturally encourages your employees to say.
This Article written By Saumya Bhatnagar, who is the CTO and Co-founder of InvolveSoft, a workplace community platform which helps employees volunteer in the community.
