The Great Resignation was a critical challenge for startup and SaaS leaders worldwide starting in early 2021. However, learning to keep employees happy and motivated has always been essential.
After a peak during the Great Resignation, when more than 50 million Americans voluntarily left their jobs in 2022, the trend has now reversed. The number of quits steadily declined throughout 2023, with just 3.47 million Americans leaving their jobs in November, one of the lowest figures since February 2021.
As a result, quits have returned to pre-pandemic levels, signaling a cooling labor market as workers grow more cautious amid ongoing recession fears and a shift in the economic landscape.
While many factors led to this culmination, one common denominator is that employees seek jobs that offer more flexibility and better working conditions.
That said, at Close, during 2021, we had:
- An average employee retention rate of 89 percent (compared with a 75 percent average within top startups)
- The new hire retention rate in the past three months was 95 percent
In addition, 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 lasting impact of the Great Resignation on startups and what Close's leadership has learned about keeping employees happy in the changing labor market.
What is the Great Resignation, and How Has the SaaS and Startup World Been Affected?
The Great Resignation was a period marked by a significant number of workers leaving their jobs in search of better careers and conditions, driven by pandemic uncertainty and the rise of remote work. Although this trend has cooled, it's wise for employers to stay prepared; the labor market could shift again, potentially reviving this trend within the next few years.
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.
While the past two years saw a rapid increase in job switching, recent data indicates a return to a more stable job market.
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 receive hundreds of messages from recruiters and hiring managers every month, some offering 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.
However, 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 joining you takes a couple of months to learn how things work. If they leave right when they’re just starting to have an impact, you’re 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 and offering great perks? It sounds sweet.
But the quick turnover has a dark side: You can’t focus and do great work if you’re constantly pondering leaving.
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 won’t find fulfillment or achieve excellence in your skillset if you switch 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 have the short end of the straw here. How can you keep your employees happy with fewer resources to offer big perks or high salaries? How do you retain good employees without offering more money?
If you’re still battling the Great Resignation, remember this: money isn’t everything.
Here are five ways we’ve retained our employees (some of whom for over ten years) as a bootstrapped tech startup:
1. Stop Getting Excited About Distracting New Talent with Money
Many leaders are repeating that the Great Resignation has been a blessing and a curse: a curse because they’ve lost a 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 be excited about?
Should we really be excited about distracting someone that easily just by offering them a little more money?
If I can recruit someone away from their current mission simply by offering more excitement, a higher salary, more stocks, or a better title, that’s why they’ll leave me down the road.
So, ask yourself: are these 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.
To stand out to talented people, you need to think more long-term than your competitors.
Here’s how I think about hiring: if I don’t want to work with you for the next 30 years, I don’t want to work with you for a single day. We want relationships that will last a lifetime.
Longevity only happens within a work environment that enhances people’s quality of life. People crave calmness and stability. Give them meaningful, challenging work in a stable, calm environment, and they’ll be more likely to stick around.
That doesn’t mean they must 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 our people's time 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 ensure 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.
Another way we think about time is when it comes to vacation. Our directors proactively contact their people and advise them to take more breaks or use more vacation time. We also give people the option of working a four-day workweek instead of five.
If combating the Great Resignation involves learning how to keep employees happy and motivated, consider 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 genuinely care enough about your people, take care of them, and put 10x as much effort into retaining them than hiring new talent, you can keep those people with you. One way to do this is by supporting employee growth and competence development.
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.
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 stable, calm culture that 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 work, make sure you’ve set up the structure and processes to do it right. Jumping into remote simply to appease 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.
The Best Time to Prepare for the Great Resignation was 10 Years Ago; the Second-Best Time is Today
In business, trends 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.
