Employee Churn is the Most Expensive

Today we’re talking about some of the causes for employee churn.

When a good employee leaves it can cost tens of thousands of dollars to replace them. Despite this, many founders will pursue various false economies for minimal gain.

Some examples:

Travel — In today’s world of remote work it is tempting to avoid paying the significant travel costs to bring the team together regularly. But those in-person connections matter a lot, for both productivity and retention.

Compensation — Over optimizing on small amounts of salary and equity is common for founders, but often leaves a bad taste for the employee. Especially, when they inevitably discuss it later, with their colleagues.

Burnout — Some founders are obsessively lean on hiring. I’m an advocate for keeping your team small but if you have customers waiting and your team is overstretched, don’t wait on hiring.

So when you’re thinking about saving money around the team, remember that you might also be risking employee churn, which is very expensive.



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Ash Rust

Ash Rust

Pre-seed Investor. Email: ash@sterlingroad.com. B2B, US only. I work with founders for 3 months before investing. More info: http://SterlingRoad.com/process