In the startup world, it's important to be up on the latest and greatest. (Think "big data" and wearables.) But be careful that you don't neglect the tried and tested: Let's talk turnover.
I see eyes glazing over already. When you have only 60 employees (and even more so when you have only 10 employees), you may think that you know not only all the employees' names but their favored pizza toppings and whether they have a significant other. You don't need a percent or ratio to tell you about turnover--you know where every employee who left went.
Except you're wrong. You need numbers. It's precisely because you do know these people, inside and out, that you need cold, hard numbers. Numbers that don't have a face to them.
Why? Because people lie. Unless you have a particularly volatile staff for which screaming is common place, no one says, "Gee, boss, the reason I'm leaving is that you're a micromanaging twit." Someone says, "Oh, my word, I'm so sad to be leaving, but this new opportunity just fell into my lap! I couldn't say no." So, you file that away in a "Lucky for him!" category in your brain and neglect to ask the question: Why did he go looking for a new job in the first place?
Though headhunters call all the time, your employee needs a reason to listen to them. And many of these opportunities that just "fell" into laps were strongly pursued. So how do you look at turnover when you're a startup? Here are five tips:
1. Don't panic about high percentages. Don't unleash a screaming fit on your chief marketing officer when the marketing department has 33 percent turnover in one year if turnover for the past five years was zero, and there are three people in the department total and one left. If you have 33 percent turnover every year for three years in a row in that three-person department, it's far more likely that there's a problem.
2. Let length of service also factor in. In startup culture, you'll have a lot of new people on board. That goes with the nature of startups. How long are they staying? If people are booking it out the door in six months, it's not because Silicon Valley is a tough market for keeping good people. It's because your management stinks. Sorry. Changing jobs is a huge pain, and people don't do it after six months for small bumps in salary. There needs to be something more for someone to go through the stress of seeking out and interviewing for a new job.
3. Consider who is losing the talent. You might be tempted to lump all numbers together; after all, you know everyone. But unless you're really small, there are multiple managers. Is one manager losing people at a much faster rate than the others? And look at internal turnover as well. Are people fleeing Bob's department? Is that because Bob is an excellent talent finder and developer, and he brings people in and prepares them to take on different roles? Or is that because Bob is a jerk?
4. Don't seek zero turnover, either. Zero percent turnover sounds awesome. Everybody loves working for your company! And this may well be the case when it's just your close team members, but as your company expands, turnover at zero means you're probably doing something wrong. Why? Because no company can hire perfectly all the time. And though perfect jobs don't generally magically appear, sometimes they do.
You don't, actually, want to be the company that no one wants to leave, ever, because you never get the good type of turnover. And what is the good turnover? When someone who isn't a star performer leaves. Or, even, when someone who is a good employee, but is extremely annoying, leaves. You want that. It saves you having to deal with discipline and firing and such.
So, why are these people who clearly aren't a good fit staying forever? It probably has something to do with the size of their paycheck and the slacker nature of your management. If you're not giving needed feedback to low performers, they have no reason to realize they aren't good. They don't know that they aren't performing up to par, and that they might be better off somewhere else. It can also be that you're overpaying your low performers so that, try as they might, they can't find somewhere that can fill their bank accounts.
5. Start looking at the numbers now. And start making changes based on what you see. You want to look for patterns and solve the problems that come up. Even when someone awful quits voluntarily, it's a reminder that you need to tweak your hiring standards. Sometimes, nothing needs to be done--some turnover is normal. But you can only know that if you look at the numbers.