I was talking to someone who worked in a highly funded startup for about 2 years(2018-2019), in this time he saw around 60+ employees quitting. The total size of the company was around 100 at any time so this means around ~ 30% annual churn rate. This according to me is an unsustainable rate of employees leaving a company.
The sad part is that this is not the only organization with such a high churn rate, there are numerous such examples. 50% of the American workforce is not satisfied with their work. Also, Indian Tech startups have a retention problem worse than BPOs.
After an employee leaves, the company has to find a replacement that takes time and money. Also, sometimes the replacement backs out just before he is about to join so there is a lot of wasted effort. Now, say finally the new employee has agreed to join then the company has to train and orient the employee with the company’s mission and the background knowledge which again takes time thus is a cost to the company.
The companies should pay more attention to the employees’ satisfaction level but sometimes they don’t have exact knowledge about the satisfaction level of the employees or are too busy with other “important” tasks or just don’t care. The employees do give a signal before taking the ultimate call to quit but seldom do they find any support to carry on. And finally, without any proper resolution for their grievances, they leave the company forever.
As found in a poll of 1 million employees, “employees quit their bosses, not their companies” so people issues are most of the time responsible for the departure of the employees. Employees complain that they aren’t being treated with respect, denied opportunities, not heard enough, discouraged, and not rewarded hence the outcome of leaving the organization is natural.
Though every company has an HR team, somehow that team is focused mostly on the organization and isn’t empathetic towards the issues faced by the employees. Slowly the employees lose all the trust in HR and move towards finding opportunities elsewhere.
When the employee quits the founders or upper management sometimes come into the picture and try to save the day like superheroes but till that point, the trust of the employee in the organization vanishes, and his/her mind is somewhere else. The ship is generally sailed by then.
In smaller companies, there is a problem with overwork too. As the number of employees is less and the work is more, there is a lot of mental stress on the employees. Though overwork isn’t the primary reason to quit most of the time it does piles to the decision-making process as when you aren’t happy with the working conditions it’s tough to do overwork thus can lead to burnout.
Great companies can’t be built without a great team so the significance of “retaining” talent should be an important focus area of the companies and most of the time it is. If the companies want to grow they have to treat the employees well, help them grow professionally, and reward them handsomely else it’s inevitable that they will go out of business soon.
One intervention to solve this multitude of problems is a focused approach to building a career roadmap of the employees. The second intervention can be companies training their upper management to be better listeners and people managers. Third companies can manage the workload on the employees by automation so that they are not overworked hence less stressed.
In a way, the ultimate objective of the companies should be to keep their employees happy. Listening to them empathetically is the first step and goes a long way. Designing organizations while keeping employees at the center would lead to the creation of an ideal workplace. At the end of the day, every human wants simple things like freedom, reward, challenge, and a place to let the creative juices flow, organisations should strive towards these traits.
You can observe that how starting from the problem side helps us see different aspects of problems like why it exists, how big it is, why current solutions are inadequate, and what potential opportunities exist. If you plan to do something about any problem you should start with a sub-problem(say for the above problem, helping companies get regular feedback from their employees by developing an app or other problem can be to help companies train their managers on people issues), try to execute it, and see if you get any traction. Always remember the problem space is much bigger than solution space(that means there are many unsolved problems) so immerse yourself in the problem first, understand its nuances. The solution will naturally follow.