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How to Build Loyalty in a Volatile Startup Environment

Dana Gradinaru
4 min. read

We’ve all seen it happen: a startup starts getting some press, or gets a new round of funding, and they make a desperate, fast-paced push to hire new people and grow their team. Everyone expects things to move and change quickly in a fast-growing business, but the hope is that your core team mostly stays the same as you add new members. Unfortunately, your hastily acquired talent churns a lot more quickly than you expected—some in less than a year—and pretty soon you’re right back where you started.


This is the type of challenge that every business has to deal with, but for startups it can be particularly impactful. Startups are synonymous with fast-paced growth and unpredictability; consistency and ease-of-communication are rarely easy to come by. You need your team to be a source of stability, but if you can’t hire good fits and work to inspire loyalty then stability is at risk of going out the window.


So, what is to be done?


Why Is Turnover So High for Startups?

To understand the appropriate steps to take to avoid and mitigate employee turnover in the startup world, it’s helpful to first understand how we got here. The labor market is as competitive as ever (with the US in particular seeing a historical employment rate), so it stands to reason that companies have it harder than ever when it comes to hiring the right people for their open roles. The decision to change jobs isn’t something that most people take lightly, with any number of factors playing a significant role: better pay, the promise of improved job satisfaction, a new professional challenge that they’re excited to tackle, etc.


To hire people in the first place, you need to let them know that you can offer some or all of these thing—but for startups in particular the bar is even higher. You need to find people who will fit into a culture of growth and really commit to helping you forward your mission. Startups require a special breed of employees who can latch onto your vision and run with it. These people are NOT easy to find, which makes lowering your standards seem tempting, but when startups hire people who don’t fit this bill the clock starts ticking almost immediately. Sooner, rather than later, any employee who’s not a good fit for this environment will seek out a new job elsewhere. Unfortunately, startups often struggle to find the perfect fit, contributing to increased turnover and starting the whole vicious cycle anew.


What’s Your Mission?

Based on the challenges that startups are facing right now, it stands to reason that the way to increase loyalty and reduce turnover is to find and hire the right people in the first place—the kinds of people who are built for startup life and will grow alongside your business. For most businesses, the starting point for attracting more of the right candidates begins with crafting an EVP (employee value proposition) that informs your employer brand; but if you’re working at fast-growing startup you almost certainly don’t have time to give a full accounting of all of the different ways you add value and provide benefits for your people. So, instead, you should focus on your mission. Why do you do what you do? What changes do you hope to bring about in your particular area or in the world at large? What gets you out of bed in the morning? If you can’t provide clear answers to these questions, it will be difficult to catch the attention of new talent, and it’ll be even harder to sustain the interest of your existing team. Instead, they’ll begin to drift away over time, and you’ll have even more open seats to fill.


Provide clear answers to those questions, on the other hand, and the right people will latch on to it. If you have an office with a whiteboard, consider writing your mission across it in big letters to remind everyone on your team what you’re doing and why you’re doing it. No vision, no matter how great, can change the world if it stays a secret—so make sure your employees know what you expect and why you expect it. Once they’ve got a good sense of why they’re there, it’s time to give them the freedom and autonomy to run with it. Once you offer someone mastery, autonomy, and purpose, (assuming that their basic needs have already been met: good income, insurance, etc.), there’s no reason they won’t stick with your business for a long time, helping you to become world-class at whatever you do.


Finding the Right People

Okay, you’ve got your mission figured out, and you’re using it to motivate your existing employees and thereby reduce turnover—now how do you leverage that same mission to find new hires with a high probability of retention? Essentially, you need to spread it aggressively (but politely) across a host of social media sites and other web channels. Again, a mission that’s kept under wraps can’t inspire anyone to act, which is why you need to figure out where your ideal hires spend their time online and become a big presence there. Make sure your goals, dreams, and hopes for the future of your company inform every piece of content—from your job descriptions to the copy on your career website to the constant stream of ads and posts aimed at your target audience.


If your mission is super clear, the right people will take note and send in applications—while the wrong people will simply see themselves out of the process. This—the fact that people will self select out of your application process—may seem like an issue, but I can assure you that it’s a blessing in disguise. While it’s always tempting to hire quickly just to make sure your seats are all filled (you need developers now, after all, and sales people, and marketers…), the right people are worth the wait. Not only will they churn at a lower rate, they’ll be truly dedicated to making your vision a reality and turning your startup into a success story.


About Dana Gradinaru: Dana looks after a number of key customers at SmartDreamers, where she is excited to be an advocate for SmartDreamers’ bold approach to talent acquisition. With an international background and a track record of success in mission-first organizations, Dana has spent 6 years working closely with startups. She is particularly fascinated by the journeys of early-stage ventures.


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