Retaining staff in high-growth companies: don’t be a spaceshipJune 15, 2016
Right now, there’s a talent war between high-growth companies. Finding star performers gives you an edge, from attracting investors to outsmarting the competition. You pour energy and money into luring talent across. They sign up, and for a second, you’re in orbit.
Until they get poached by the competition. Your edge becomes someone else’s advantage. And that star performer didn’t stay long enough for you to gain value from their talents.
That’s why it’s vital for high-growth companies to have strategies for holding onto good people, along with campaigns to bring them on board.
We break down retention into two key areas:
Pay is where the conversation on conditions usually starts, but don’t stop there. In another post , we gave you some tips for using non-financial incentives to encourage staff retention. Any workplace can consider flexible working arrangements and recognising high performance.
What about conditions specifically for high-growth companies?
We tend to think of conditions as just pay and perks, but reporting relationships play a huge role in shaping people’s experience of work. When your organisation is going through growing pains, reporting is in flux. New people come on board. New teams are created. The organisational chart changes so often it’s out-of-date almost as soon as you print it.
Here’s what you should bear in mind to keep your people engaged:
1) Change fatigue may set in if you shift relationships too often. As a founder or senior manager, you may be prepared to wear constant change. But for other staff, it can just wear them out.
2) If you need overlapping reporting relationships, make sure this is spelt out in writing. For example: ‘The engineering director is responsible for engineering standards, and the project manager is responsible for tasking.’
3) Rather than totally redoing your organisation’s structure each time, consider creating virtual teams. Here, your people report to one manager for the project duration, but keep reporting to their original manager on overall workload and performance.
Enter the spaceship. A spaceship company is an organisation where there are two tiers of staff. Senior staff are highly skilled, highly paid, and highly invested in the company. Often, they will be the founders or very early hires.
Then there are the people on the ground. These may be call centre staff, customer service reps or coders.
But there’s no tier connecting the two levels. There’s no way to get off the ground and into the spaceship.
There are three major risks for spaceship companies:
1) No succession planning: if one of the early hires decides to leave, who’s there to take their place? You have to go through a lengthy and expensive recruitment process, while your company loses ground.
2) Bottlenecks: when everything lands on the CEO’s desk, you lose the capacity to make decisions quickly. You become less agile and less competitive.
3) Turnover: when someone in the call centre decides they’re ready for higher responsibilities, there’s no role for them to step up to. They have to step out.
So what can you do instead?
1) Create opportunities: when cashflow is tight, with all your energy going into development and sales, it can seem hard to justify the return on investment of creating new roles.
There is another way of looking at the situation: balance the cost of creating roles against the potential cost to your business of losing good people.
2) Tailor opportunities: when you need more people, start by looking inside your company. If you think laterally, you may find a promising candidate right under your nose. Is your coder studying business administration at Uni? Is your sales rep studying graphic design?
If an internal candidate isn’t currently working in that field, they may need more mentoring and support initially. Balance this against how well they understand your business. They’re already inducted. They get how you work, so they’ll hit the ground running.
Staff retention makes good sense for high-growth, rapidly evolving companies. When you gain an edge, you’ll keep it. New people will stay, become embedded in your business, and help sustain your growth.
What are your strategies for retaining people? Let us know.