The Great Resignation has been top-of-mind for startup and SaaS leaders around the world since early 2021. But learning how to keep employees happy and motivated isn’t something that just started now.
According to the US labor department, over 4 million people quit their jobs in April 2021. And the Great Resignation continues in 2022: according to one report in early 2022, the number of Americans quitting their jobs has exceeded pre-pandemic highs for eight straight months.
While lots of factors led to this culmination, one common denominator is that employees are looking for jobs that offer more flexibility and better working conditions.
That said, at Close, during 2021 we had:
- An average employee retention rate of 89% (compared with a 75% average within top startups)
- New hire retention rate past 3 months of 95%
Along with that, the average tenure of our current team members is 35 months, compared to an average of 24 months in the startup world.
These stats aren’t here to brag. They’re here to show you it’s possible to keep your employees happy and stable, even during the Great Resignation.
So, how can you attract and retain top talent?
Let’s discuss the Great Resignation and its impact on startups, as well as things the leadership at Close has learned about how to keep employees happy.
What is the Great Resignation, and how has the SaaS and startup world been affected?
In case you’ve been living under a rock: the Great Resignation is the term used to describe the situation where workers are leaving their current jobs in search of better careers and better conditions. Due to the uncertainty of the pandemic and the rise of remote work, great talent is growing more likely to switch between companies for better positions.
The cycle of life is continuously speeding up, and in business we see this translated into shorter career cycles. In the past, people would join one business out of college and work there until they retired. Later, people started having two or three jobs during their careers.
In the past two years, though, things have changed.
At Close, we saw a big drop in inbound applicants to our open jobs when the pandemic hit. We did what most other tech companies did: we switched our talent acquisition to a more outbound-focused recruiting process.
For great talent in the SaaS world, this means they’re getting hundreds of messages from recruiters and hiring managers every month, some offering pretty incredible benefits.
With all of these factors combined, we’ve arrived at a dizzying pace of change with great talent switching jobs every 18 to 24 months in the tech world.
But this shift can have a negative impact on both companies and employees.
Why high turnover spells trouble for startups AND employees
For startups: if you’re losing your greatest talent to better offers, you’re never going to build a killer team that’s capable of creating something sustainable.
Every person that joins you takes a couple of months to get to know how things work. If they leave right when they’re just starting to have an impact, you’re basically just throwing your money out the window.
Besides that, how can you keep employees happy and motivated when their teammates are constantly changing? With so much noise and movement, how can you build a tribe?
For great talent, the temptation to jump when a great offer comes along can be strong. Therefore thank you gifts for loyal employees could be a nice treat and will introduce them to your culture.
I mean, who doesn’t want companies fighting over them, offering great perks? It sounds sweet.
But there’s a dark side to the quick turnover: You can’t focus and do great work if you’re constantly pondering leaving.
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If everyone in a company is flirting with the idea of leaving or wondering who’s about to leave next, then no one is focused on doing great work and building the best company and product possible.
And no matter how high your salary goes, you’re not going to find fulfillment or achieve excellence in your skillset if you’re switching jobs every 6 to 9 months. Investing in continuous learning and development through an employee training platform can help you acquire new skills, stay competitive in the job market, and progress in your career.
How to keep your employees happy: 5 keys for startups to combat the Great Resignation
A lot of startups might feel like they got the short end of the straw here. With fewer resources to offer big perks or high salaries, how can you keep your employees happy? How do you retain good employees without offering more money?
If you’re battling the Great Resignation coming into 2022, remember this: money isn’t everything.
Here are 5 ways we’ve retained our employees (some of whom for over 10 years) as a bootstrapped tech startup:
1. Stop getting excited about distracting new talent with money
Lots of leaders are repeating the idea that the Great Resignation has been a blessing and a curse: a curse because they’ve lost great talent, but a blessing because they’ve been able to hire incredible new talent away from other companies.
But is this something we should really be excited about?
Should we really be that excited about distracting someone that easily, just by offering them a little more money?
If I’m able to recruit someone away from their current mission simply by offering more excitement, a higher salary, more stocks, or a better title, that’s the reason they’ll leave me down the road.
So, ask yourself: are these really the kind of people you want to build a business with?
2. Create a culture of longevity and build long-term relationships
Something I hear again and again from interviewees is:
“Steli, one of the things that made Close stand out to me is that everyone I talked to has been at Close for a long time and seems to be incredibly happy and bought into the culture.”
They tell me frequently that they applied for other jobs and talked to two or three people who had been with the company for less than 18 months.
If you want to stand out to talented people, you need to think more long-term than your competitors.
Here’s the way I think about hiring: if I don’t want to work with you for the next 30 years of my life, I don’t want to work with you for a single day. We want relationships that will last a lifetime.
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Longevity only happens within a work environment that enhances people’s quality of life. People crave calmness and stability. Give them meaningful, challenging work but in a stable, calm, environment, and they’ll be more likely to stick around.
That doesn’t mean they have to stay with you for 30 years, but they should at least feel like they could.
3. Increase the quality of work time for your employees
Here at Close, we think a lot about the quality of the time our people spend working. We’re constantly thinking about ways to decrease the waste of time that’s associated with work. For us, that’s meant:
- Having fewer synchronous meetings
- Creating very structured meeting agendas prior
- Making sure all scheduled meetings could not be done asynchronously
We make sure that we give people power over their time, especially since we're communicating remotely. We iterate regularly on our meeting structures to make sure we’re not wasting time.
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Another way we think about time is when it comes to vacation. Our directors proactively reach out to their people and advise them to take more breaks or use more vacation time. We give people the option to do a four-day workweek instead of five.
If learning how to keep employees happy and motivated is on your agenda to combat the Great Resignation, think about how you can show more respect for everyone’s time.
4. Think about your people as your most valuable asset
As the CEO of Close, people often ask me: what keeps you up at night?
As far back as I can remember, I’ve always given the same answer: my people.
This is probably one of the most important things you can learn as a startup leader: your most important asset is not your technology, your product, your millions in VC money, your publicity, or your audience. Your most important asset is your people.
Anyone can teach you tactics to copy and paste. But it’s not about the tactics: it’s about the culture. If you truly care enough about your people, take care of them, and put 10x as much effort into retaining them than hiring new talent, you’ll be able to keep those people with you. One way to do this is by supporting employee growth and competence development.
Personally, whenever I think about my people and whether or not we’re empowering them to do their best work, I always think we could do better.
When you view your people as your greatest asset, you’ll develop a mindset of constantly looking for ways to take better care of your people.
And the right people, the ones who have the same values, will be attracted to you like a magnet.
5. Remember that offering remote options isn’t the only answer
We’ve all read the articles about companies forcing employees back to the office and half their workforce quitting on the spot.
I believe that in the future, asking whether or not there’s a remote option at work will be like asking if you’ll have access to electricity or internet at work. It’s going to be a component of almost every job. It’s inevitable.
That said, simply offering a remote option isn’t the ultimate solution to finding great talent in the Great Resignation.
It’s not that easy.
Building a culture that is stable, calm, and allows people to do their best work in their own way is all part of standing out as an employer. If you’re going to offer remote, make sure you’ve set up the structure and processes to do it right. Jumping into remote simply for the sake of appeasing the masses can quickly backfire.
On the other hand, building a culture that values flexibility and empowers people to do their best work on their terms will set you apart.
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The best time to prepare for the Great Resignation was 10 years ago; the second-best time is today
In business, there are trends that come and go. But taking care of your people will always be in style.
What I’ve given you isn’t a few quick tips you can knock out in an afternoon. There is no quick solution to this problem.
Here’s the point: don’t think about how to solve this problem now. Work on the problem with patience and longevity in mind. If you do that, you’ll be in a much more competitive position.
Wondering how to start hiring and scaling your sales team? Check out my book: The Sales Hiring Playbook.
