Ask the expert: your questions on growing the business answered
In this fortnightly column, Ask The Expert, we aim to provide readers with practical advice on how to grow their businesses.
Greg Watts is our resident expert. He is the founder of Demand Creation Partners, a London-based growth consultancy that helps fintechs and paytechs to scale. A visiting lecturer at the American University in Paris and regular industry speaker, he was previously head of market acceleration at Visa Europe.
QUESTION: How can I improve employee retention as my business grows?
How well are your talent retention strategies working?
A 2019 US Bureau of Labor Statistics (BLS) report revealed that American technology workers are quitting their jobs at the highest rate since 2001. In addition, a 2018 Ladders survey of 50,000 US workers earning more than $100,000 found that 67% envision quitting in the next six months. That’s two thirds of the professional workforce!
With the rise of open banking and emergence of new fintech players, employees today have ample choice when it comes to deciding where to work. It’s therefore critical for businesses to ensure they have the right cultures and processes to support and nurture talent, particularly as they are going through hyper-growth.
This column examines ways in which fintechs can implement effective strategies to retain and develop their most important resource: their people.
1. Ask people what they want.
It may sound obvious, but a good starting point for any business looking to improve retention is to speak to employees.
Ask them what they like about the company and their role, aspects they’d like to change, and any frustrations they’ve experienced. Discuss what they want to achieve professionally and where they envision being a few years’ time. Insights from these discussions will help you tailor and enrich the employee’s experience and help pre-empt any decision to leave.
In addition, check whether there have been any changes in their personal circumstances that could impact their work. For example, if someone became a parent recently, is there anything you could do to adapt their role in relation to their lifestyle?
Rather than waiting for formal performance reviews or one-to-ones, consider how to gather these insights proactively – for example, by establishing a company culture task force staffed by people representing different parts of the organisation.
2. Pay more than the market rate.
A new report has revealed that employees working for tech startups and scaleups typically leave their jobs because of workplace culture and/or bad management, and take positions based on salary.
The ISL Retention Report – Tech Scaleups 2019 surveyed nearly 200 people who left their jobs in the past four months and found that 80% cited working environment as the primary reason. Line management also played a significant role, with 79% stating that their manager had a direct impact on their happiness at work; while 77% cited a lack of career progression opportunities. Meanwhile, 83% said that salary and renumeration was the most important reason for taking another role.
Therefore, a simple tactic to support staff acquisition and retention could simply be to pay key performers a salary above market rate.
3. Provide career progression opportunities.
People with the longest fintech company tenures tend to have one thing in common: they’ve usually performed different roles that give them new challenges every couple years, whether that’s a promotion or sideways move.
Not every company can provide this degree of change, but it’s worth exploring as part of your talent management strategy. Take, for instance, a successful sales person. They might be a top performer, but if they want professional change, don’t keep them in their role just to meet your targets. Have the confidence to use their experience in a different way, such as in an account management position or developing a new, strategic market.
If you make an effort to understand the inner motives of your employees, you can retain them for longer by being able to offer them new opportunities when the time is right. You’ll also create a culture that places a high value on people while visibly rewarding achievement and performance.
Bringing it all together.
As touched on in previous columns, getting culture right while undergoing hyper-growth isn’t easy. It’s critical to have processes in place that focus on employee engagement and retention as your business develops. These don’t need to be complicated or expensive – indeed, they can be simple.
Getting your company culture right early will help create a motivated, high performance team – improving your chance of commercial success.