Organisational Fitness

Why do good employees leave when your company grows?

Lydia Watson

If you’ve ever founded, or worked for, a startup, you’ll know it’s a unique experience. There’s a buzz like no other. The days can be long (and the nights even longer…), your team is a tight-knit group fuelled by adrenaline, and the descriptor ‘rough and ready’ feels like a badge of honour.

So when your startup matures, and one of your core team tells you they’re leaving, it’s difficult to not take it personally. Why leave when business is booming?! Getting answers can prove tricky.

Business growth doesn’t have to mean a high attrition rate – learn how we can help.

High attrition rate? You’re not alone

Whether a startup or multinational, you may have experienced a rise in resignations over the last few years. A quarter of employees quit in the last two quarters – 68% of them without another job to go to! – and a third are thinking about it. 

A lot of us have seen employees leaving in waves, meaning it’s not our problem – right? But it’s not necessarily The Great Resignation wave: the top reason was a “toxic” workplace culture. Other given reasons related to employee experience too – from work-life balance to salary.

Top 10 reasons why employees leave their jobs after a growth period

Small-and-growing companies aren’t immune to these issues. In fact, they’re more at risk than other organisations

But because they’re driven by such an intense sense of purpose, resignations can still come as a shock. So here’s the top reasons why employees leave their jobs – even when they’ve become part of the furniture:

1. Your vision has been compromised 

One of the biggest reasons people like working for startups is the crystal-clear vision. Maybe it’s building a more ethical coffee brand, or making banking more user-friendly, or disrupting the travel industry. Whatever it is, it’s usually something exciting that people can get behind.

The trouble is, as your business grows, some elements of your vision change. Either accidentally, or by necessity. Some of your original employees won’t be able to overlook that.

2. The workload is getting too intense

Work hard, play hard’ is the typical mantra of a startup. But when growth brings in more of a structure, then the workload often increases while the playing has to end. That can lead to burnout in your longest-serving employees – because success just means they have more to do.

Work-life balance matters, and employees are more aware of that than ever. If they realise that your sprint to success hasn’t led to smoother sailing, they may be forced to consider leaving.

3. There are too many new employees

Change is inevitable. That doesn’t make it easy. After the necessary influx of new starters – to support your thriving business, and fill new needed roles – your original team could feel displaced

Your team dynamics are going to change (no more shots with the CEO!) and that won’t work for everyone. They may also resent having to get a swathe of eager new faces up-to-speed, without much in it for them.

4. You’ve hired some bad managers

WIth all your new staff, you’ll need people to manage them. After all, the co-founder can’t be responsible for 50 weekly 1-2-1s – they’d never get anything else done. But if you’ve hired a management team too hastily, you may risk alienating your existing staff. Because employees leave bad managers.

From micromanagers to people too eager to make big changes, there’s a lot that can go wrong here. If you don’t handle this transition carefully, older staff will resent answering to new people they neither trust nor respect.

5. They miss the chaos of the early days

Ah, it was glorious. Remember when you used the boardroom for an espresso martini-making session at 3 pm on a random Wednesday? Or when everyone had to decamp to the warehouse to get a wave of Christmas orders out on time?

The mess and mixed responsibilities of a startup are a big driver for some. As soon as you start introducing structure, that can take away the magic.

6. The company culture has become toxic

It’s hard to accept it but consider your culture. Is your organisation full of power struggles and finger-pointing, in-fighting and bad-mouthing? With such a tight-knit group, it’s easy for over-familiarity to make you fall into ‘family dynamics’ in the worst possible way.

When your longest-serving employees start to leave, take an honest look at your culture. There may be some things you need to sort out urgently. 

7. You can’t pay them a higher salary

One thing that start-ups aren’t known for is their impressive salaries. And that’s for obvious reasons: money is tight, and it’s expensive to get going. That’s why a lot of early businesses compensate with a lively atmosphere and share options.

But although money isn’t everything, it is an important factor. Especially when living in a pricey city setting, or going through major life changes – like marriage, children, mortgages, or other big milestones. At some point, employees might need to leave for a bigger salary. And waiting for those shares to pay out just isn’t realistic. 

8. They’re not as invested as you think

Here’s the hard truth: as the founder, no-one will ever care as much as you. This isn’t your employees’ vision or their success. However invested they seem in your organisation, there’s always an upper limit – and it’s better to accept that. 

So when the first person you hired hands in their notice – the one who worked those late nights, toiled and teared-up in sync with you – don’t take it personally. 

9. They want to follow in your footsteps

In 2021, 32% of US workers quit their jobs to start a business – and in another study, 52% said they hoped to resign to found an organisation that helps their community. That startup bug is contagious, so it may be that your employees want to take inspiration from you.

If you have a good relationship with your staff, they may well tell you their plans – hoping to seek your advice in a mentorship capacity. 

10. The hard times haven’t been forgotten

A lot of former startups have a murky past. A dark year where over-eager hiring turned into rounds of redundancies or harsh cuts in other ways. The trouble is, it’s hard to forget these events – and once that shadow has been cast, your employees may struggle to overlook it.

The worry is that it happens again. The fact that they survived once may not be enough reassurance, so the safer option – for employees with their own financial and familiar commitments – is to move on.

Learn why good employees leave in your organisation: find out with an employee survey

Knowing the top reasons why employees quit their jobs is useful, but not necessarily relevant to you. So in your organisation, why are people quitting their jobs? There’s really only one way to know – by listening to what they’re telling you. That’s also your best bet for preventing turnover. 

It all comes down to employee feedback. Even if you’re close enough to grab a pint with your employees, it can be hard to voice negative opinions. No-one likes bad news, after all. So you need a repeatable, confidential method of understanding how employees feel. 

For us, that’s always going to be an employee survey.

Send an Organisational Fitness survey for free!

To understand why people leave, and why they choose to stay, you need to understand all elements of employee experience – and where there are things you could improve. That’s why we created our Organisational Fitness survey.

It covers 16 key areas of employee experience: tools, leadership, communication, innovation, and leadership to name just a few. After the survey ends, you see a clear heatmap of any problem areas – allowing you to dig deeper into feedback on that topic.

Organisational Fitness survey

Here’s how it could help identify a particular problem:

  1. You send out the Organisational Fitness survey to your team
  2. When you get the results, you see the ‘Purpose, Values’ square is red – indicating a low score in that area
  3. By clicking into that area, you can segment by tenure (for example) and see if it’s your longest-serving employees that are the ones losing touch with your purpose
  4. You can also explore the written feedback, and see if the tech has pulled out common themes that explain what specifically is driving scores down 

 

There’s a lot more you can do with our Employee Feedback Platform – but why read about it, when you can try it out for free? Get started now: 

Faster, simpler surveys – get started for free 

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