Why Your Best Employees Are Leaving

When it's not about money, your star employees are probably jumping ship for one of these reasons.

You start a business and you hire a key employee. She’s awesome. You hire another key employee. He’s awesome. Together the three of you create an unstoppable team.

Until one of them leaves.

Sometimes great employees leave because you can’t afford to pay them more and they can earn more somewhere else. Unfortunately, that happens. Often, though, great employees leave because your company has changed—and they don’t want to change with it.

Here are six of the top (non salary) reasons your best employees will leave:

1. The business grew—and so did your ego. Early on you were hesitant, unsure, and filled with doubt; those feelings come with the entrepreneurship territory. You worked closely with key employees and naturally shared some of your feelings. Those employees didn’t see you as weak. Instead they respected your honesty and openness, enjoyed the professional and personal connection, and felt good knowing you relied on them. Then you landed major customers, built a solid revenue base, and started to believe your own hype. Key employees knew you before you were “somebody.” Make sure they always get to see the real person behind your brand shell, because that’s the person they want to work with.

2. A cool startup became a corporation. Growth naturally results in some amount of processes, procedures, and systems. Running to another person’s office with a great idea got replaced by your Monday strategy meetings. Following a hunch and taking a chance on an unproven vendor got replaced by your formal RFP process. “All hands on deck” got replaced by formal job descriptions and meaningless battles over turf. Key employees typically hate processes and procedures, especially when early on anything went—and often worked. Building too many systems and imposing too many constraints, especially without getting input from key employees, makes your best employees start to reminisce about the good old days… and eventually leave.

3. The sky is no longer the limit. Dreaming is fun. Entrepreneurs dream. So do employees. In time some dreams become reality while others are clearly no longer possible. Great employees may not know what they want to do two, five, or 10 years from now, but they want to know they have possibilities. When your business matures and the only promotion left is replacing you, those possibilities disappear. You may not be able to change that fact, but you can talk openly about it. Ask key employees for their ideas. Ask how you can help them feel they are still progressing. If a great employee feels every other door is closed, they’ll head for the exit door.

4. Exceptional skill forged handcuffs. During the start-up phase you and your employees did every job. As the business grew and matured a little focus naturally crept in, and that’s a good thing. But focus also creates a problem. Key employees are key because they can do things others can’t, so the gal who does the best job keeping the trains running eventually gets stuck being the one who always runs the trains. And she starts to feel stifled. And she starts to long for excitement and challenge. And eventually she leaves.

5. Flat is now layered. Once you were the boss. Now there are multiple bosses. Employees who once reported to you now report to someone else, and it’s just not the same for them. This may be the toughest issue you’ll face. Reporting structures naturally change as a business grows, and at some point layers of authority are inevitable. Be sensitive to the emotional impact reporting to someone other than you will create for key employees. It’s a tough line to straddle, but do your best to maintain the connection you once had without undermining an employee’s new boss. Remember, layers inevitably create barriers, so how you operate within and through those layers means everything to your best employees.

6. The NFL is now a little league. In a start-up dead wood means dead company. Bigger companies have greater margins for error, even in the employees they hire. Great athletes like to play with other great athletes, and great employees like to work with other great employees. Key employees quickly get discouraged when others don’t pull their weight—or worse, don’t seem to care. One bad hiring decision can ruin a great team. While you can never be sure every person you hire is great, you can be sure to take action when a new employee doesn’t cut it.

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