Expect Tours of Duty at Startups, Not Lifelong Careers
Employee churn has been a hot topic in the employment market for over the past 18 months. With record-breaking statistics like 4.5 million resignations in November 2021 according to the U.S. Bureau of Labor Statistics, many are calling it “The Great Resignation”. The conversation is not limited to North America. A study from Microsoft found that 41% of employees worldwide are currently considering leaving their job.
In hypergrowth tech companies, turnover has always been high. At roughly 25%, it is double that of other companies. Startups have long understood that the age of people spending their entire careers in one company is done. I think that the Great Resignation is making the rest of the world understand it as well.
With everything that is going on lately, some startups have been confusing “COVID churn” with natural hypergrowth churn. Way before COVID-19, Reid Hoffman used the term “tour of duty” to describe the high churn in hypergrowth companies back in 2013. He explained that you should understand that everyone who joins your startup is joining you for a limited amount of time, i.e. a tour of duty. It may be two, three, six years, or more but it is unrealistic to imagine longer. Outside of the founding team, I find that it is rare to see people work in a startup for more than six years.
It’s the nature of being agile. As Hoffman explains, this does not mean that companies should stop caring whether employees leave or not. Instead, companies need to normalize tours of duty. To bring on the best talent quickly, you need to offer them a chance to do great things and build skills with you in a short time that will benefit their career when they leave you. Let employees leave like honored alumni rather than pretending it won’t happen and being disappointed when it does.
Why do team members leave hypergrowth companies?
Being a part of a startup is truly amazing and at the same time, it is HARD. See my previous post about why this is. If the company is doing well and entering the hypergrowth stage it is even harder. When working so hard it is natural to re-evaluate why you are doing the work you do and make sure it is the right fit for you. In my experience founding BenchSci, these are the most common reasons I’ve seen people move on:
- Burnout — Startups are pressure cookers. Like Hoffman says, you are “jumping off a cliff and building a plane on your way down”. The amount of impact you make and the Formula 1-like speed you go at takes a toll. You can only go so hard for so long. Different stages of the company will also bring with them different challenges. Some people can manage one stage fine but find themselves burning out in another, so they leave after one year. Some people are able to keep the momentum going and end up staying for many years. Both are common in a startup environment, but there are many ways startups can help spot and minimize burnout. The line is different for everyone, and employees who leave to prioritize their mental health should always be respected.
- Misalignment of career expectations — Many people join startups to accelerate their career progression. There is no doubt that if you are a superstar, you will get promoted faster in a startup than in a big, bureaucratic organization. However, if a team member doesn’t get promoted as fast as they expected to, they will be disappointed and leave. Sometimes it is because of a skill gap where the company outgrew the employee, and sometimes it is that the company did not grow fast enough to support the employee’s career ambitions. Regardless, the employee will move on.
- Not the company they signed up for — One of the most interesting parts about startups that are doing well is that every year they can become a different company. A 20-person company is different from a 100-person company and from a 400-person company. Some team members won’t like that new environment. Simply put, it isn’t what they signed up for anymore.
- Better opportunities — If you joined a startup that becomes a rocket ship, your value in the market has just increased! Your association with that company means that you are now more desirable in the market and that you have new opportunities outside the company that you didn’t have when you joined. They might even be better opportunities with more responsibilities and better pay. This is just how the market works.
- Starting their own thing — Many people join a startup because they want to learn what it takes to scale one so they can start their own company one day. Look at the “Paypal Mafia” for example. That means that they have an entrepreneurial mindset which is probably why you hired them in the first place. You should be proud of any team member who is leaving to strike out on their own.
- The environment is wrong for them — This one is simple in my opinion. If you cannot deal with rapid change, uncertainty, and lack of structure do not join a startup. If an employee hates those things and joined anyway, it is probably just a matter of time before they leave. We get that sometimes people really won’t know until they try, that is one reason BenchSci will pay to part ways. If someone feels like they made a mistake joining our company and resigns within their first three months, they will get a full month’s salary as severance to help them find a new role.
Anyone who leaves BenchSci is alumni
We embraced the concept of a tour of duty at BenchSci. In fact, it is a part of our culture strategy statement: “We hire adults, design an environment that enables them to act with freedom and accountability, and empower them with world-class leadership so they can do the best work of their lives during their tour of duty at BenchSci”.
We want people to stay at our company for as long as they want to instead of as long as physically possible. Because when people want to be here, they are doing the best work of their lives and derive tons of meaning from it. We normalize people leaving so when they feel it is time for them to leave, there is no stigma. It’s the opposite: we want to celebrate their time spent with us. It is a part of being at BenchSci. We work with amazing, capable people but they do not owe us their whole career. With that mindset, we can focus on thanking the person for their contributions versus being angry at them for leaving. I don’t understand companies that do that.
I personally talk to every person who resigns to thank them for their time and to let them know that now they are BenchSci alumni. We continue to support them as their career evolves. I also tell them that the door is always open if they change their minds. No one is limited to a single tour of duty. Whether it is 6 months or 6 years later, our BenchSci alumni are welcome back.