Apart from driving economic recovery and responsible growth, they are also catalysts for societal change and rapid innovation. SMEs account for 99.9% of the UK’s business population. Yet, the number of startups has been decreasing – from 5.9 million in 2020 to 5.6 million in 2022. Alongside this drop is the rapid rate of attrition in startup companies. Moneycontrol highlights that employee turnover rate across the globe could be as high as 50% for some SaaS startups, for instance.
A startup’s sustainable growth and development is core to its survival, and this is only possible with the right team and talent. The unprecedented rise of startups has ushered in changes in internal workplace equilibrium. The most critical key to a startup’s success is retaining the right employees—those who are invested in the company’s goals and success. Because of low budgets and scarce resources, it may be more difficult for startups to retain talent as compared to established companies. High staff turnover rates can lead to the failure of the startup, so curbing this problem should be a priority for business leaders who wish to make their ventures scalable and sustainable.
Here are three ways startups can improve retention rates among their employees:
Hire employees that fit the company culture
Your company culture reflects your values and ethos, and not every candidate will be a good fit. Putting these motivations behind your venture at the forefront can help guide you to the right talent and ensure that they will thrive in the culture of your workplace. This is why The European Business Review believes that hiring managers should scrutinize the credentials and applications with a lot of care. By being thorough they will be able to select a candidate that will fit best. During the interview you could throw curveballs during the interview process to get candidates to provide unique insights. Asking about a person’s natural strengths or common misconceptions about them will help you assess if they have the same shared values as your company. Having that sense of belongingness improves the well-being of your employees and promotes a robust and flexible work culture. By reinforcing these motivations in every element of your business as you scale up, you also let the right talent know that they will get satisfaction and fulfilment from their work.
Ensure career progression
Sustainable career growth for startup employees looks beyond just wages. It also maps out the development of their skills and the maximization of their potential. A startup’s business model should include a career progression that aligns talents and roles, and provides opportunities for reskilling and upskilling. This framework entails training through effective feedback mechanisms and mentorship. Because enriching employees’ professional experience should be a collaboration, LHH explains that mentoring is a major factor when it comes to engagement. A formal mentoring program is crucial to the success of small and medium-sized enterprises since it is designed to help a mentee learn, navigate the company’s culture, and map out their career paths. Employees appreciate meaningful conversations with their managers on improving their existing skills and learning new ones. Having this kind of space helps employees further their professional careers within the startup.
Build genuine relationships with employees
The best startups know that holding on to talented team members and top employees requires building authentic relationships with them. Creating a positive work environment that values your employees’ physical and mental well-being demonstrates your appreciation for the work that they do. Having weekly check-ups to ensure that each employee is in the right headspace will set a good tone in the workplace. Involving them in huge decisions is also part of relationship-building. In our blog on “What Can Startups Learn From Industry Giants”, we emphasized how investing in employees requires involving them in decision-making. Doing so fosters collaboration and communication within your team and creates a strong company culture that values individual contributions on top of general company growth.
It’s no secret that employees are the key to growing and further developing a startup. Building a solid team where employees can grow and hone their skills will ensure loyalty and appreciation for the business’s mission. After all, as your startup scales up, so should your team.