5 Main Reasons Employees Leave Startups

Startups are vulnerable, and depend on a number of interrelated resources working together to self-sustain into bigger and better stages of development. Take away any one piece--a chunk of capital, a launch date, a major client, or an important employee--and recovery immediately becomes the number one challenge.

This is compounded by the fact that these resources are in such short supply. Take employees, for instance; when you're just starting up, you might only have a handful of people working for you. If any one of them leave, you could put your deadlines, production, and short-term goals in serious jeopardy. To make matters worse, startups are especially prone to employee turnover, which leaves them even more vulnerable to unforeseen departures.

To mitigate this risk, you have to work hard to decrease your employee turnover, and to do that, you need to understand why your employees would leave in the first place. In general, startup employees have five motivations for leaving--and nearly all of them are preventable:

1. A better offer. Maybe your employee was browsing job opportunities, or maybe a competitor reached out with a promising opportunity. Either way, your employee is now looking at a job with more benefits, better pay, and fewer hours. The choice is obvious, right? You can't blame an employee for taking what is, on paper, a better deal, but you can make your own offer better--even if you don't have the money to front. Offer intangible benefits like camaraderie, flexible hours, or a more fun, flexible work environment. Show your employees you care about them, and they'll stay no matter what the pay difference is.
2. A lack of faith. Startups are inherently volatile, and employees know this. Most workers are focused on building a career in the long-term; they want to start moving toward a future that's going to reliably support them. If they feel like your business doesn't have long-term potential, they may bail out early in the search for something a little more stable. To counteract this tendency, work hard to show your employees the potential for your startup to succeed, and make them an active part of building the company from the beginning--stock options or part ownership goes a long way here.
3. Burnout. Startups are under a lot of pressure to succeed; the founder, partners, and other investors are all anxious to see things take off, and that usually means long hours and tight deadlines for employees to manage. Some employees thrive in these pressure-cooker conditions, but for most people, even a little is too much to handle. If these conditions persist for too long, you may start to see your employees burn out--even if they typically thrive under pressure. To prevent this, try to relegate the pressure to isolated events, and encourage your employees to take breaks, vacations, and time away from the office throughout the week.
4. Individual differences. When you work for a startup, you're working in close quarters with a small number of individuals. In a big business, you're usually protected by cubicle walls, inter-departmental indifference, and a general degree of anonymity, so when you're forced to work face-to-face with a small group, tensions can arise. Over time, this may produce a degree of animosity or a general feeling of not belonging, as if the employee doesn't fit within your culture. To correct this, you must first establish a consistent culture from the beginning--set expectations proactively about the type of work environment you offer, and only hire people who fit into that culture. As an added measure, include ample opportunities for feedback within the group to uncover any differences before it's too late.
5. Personal issues. Your employee's spouse might need to move out-of-state. Your employee might be going through a personal crisis. Personal issues are impossible to prevent, and if they're significant enough, they could prevent your employees from working for you entirely. There's nothing you can do to stop these issues from emerging, and nothing you can do to dismiss them. Instead, all you can do is offer flexibility; offer shorter, more flexible hours, work-from-home opportunities, or even extended leaves of absence in extreme cases. If you show support here, you'll earn an employee's loyalty indefinitely.