If you run a startup and find it difficult to retain employees, you are not alone. Startups the world over face the challenge of high employee attrition rates. According to Moneycontrol, attrition rates among new employees are as high as 50% for some startups.
But why do startups have high attrition rates?
The following are some common reasons employees leave startups at a faster rate than in more established companies:
1. Lower hiring budgets: Startups are not always well-funded. While we constantly hear stories about startups raising eye-watering investments and spending millions of rupees, these are exceptions and not the rule. The ground reality is that many startups are bootstrapped. They may not have the budgets to retain top-tier talent, thus losing them to companies with better offers.
2. Inadequate remote working and collaboration tools: While many employees today appreciate the option of working remotely, communication can be a challenge. If startups cannot invest in tools to streamline remote communication and collaboration, they risk frustrating and losing employees.
3. Skewed work-life balance: Working at a startup often requires employees to don multiple hats and put in longer hours, especially in the earlier stages. This can lead to poor work-life balance and push employees to look for jobs that are less demanding.
4. Job security: Startups tend to have a much higher rate of failure than established companies. This eventually causes employees to jump ship and take up jobs that offer higher security.
Replacing employees is time- and cost-intensive. Every time an employee needs to be replaced, your:
A high attrition rate turns a startup’s attention away from building their core capabilities, and instead forces them to waste valuable hours and resources on repeatedly hiring new people. The actual costs of replacing employees, combined with the opportunity cost of this distraction, can add up quickly.
“Hire like-minded people who can go on to instill your values among new recruits and strengthen the company’s work culture.” - Sanket Atal, SVP & MD - Salesforce India
“Employees don’t leave companies. They leave managers. Your managers and leaders need to empower employees with a sense of growth, ownership, flexibility, learning, and purpose.” - Sanket Atal, SVP & MD - Salesforce India
Controlling employee attrition is key to any startup’s success. Higher employee retention improves organisational efficiency, sends positive signals to outsiders, and allows the workforce to focus on the core value proposition of the startup.
Salesforce’s Employee Engagement solution can help your startup transform employee experiences by turning your HR department into an employee success department. The solution improves your employee experience by