High Churn Rates in Product-Based Companies

When I started my career as a junior developer at a service consulting company, I noticed that people often changed jobs. For employees, switching companies come with a pay raise and often a levelling up. However, for companies, losing a valued employee is obviously undesirable.

High churn rates have a relatively minor impact on service-based companies, while product-based companies are more affected. They lose the time that an employee spent getting to know the product; additionally, training someone new comes at a cost.

As I moved up the career ladder to a manager, followed by CTO, I started thinking about reducing the churn rate. How can we retain people for longer? How can we motivate them? How can we make sure that they feel ownership of the work? What is the right leadership way to achieve these goals, especially in a remote environment?

I adopted several management techniques as CTO and brought these experiences into my current company, which I founded in 2019. Today, our teammates genuinely feel that iMORPHr is their company and take complete ownership of the work. So far, we haven’t had a single person leave.

How We Retain Our Employees

The 4-Step Interview

Building trust and presenting an empathetic leadership approach is critical. When we look for a new team member, we have a 4-step process that introduces them to the company and starts building trust from day one.

  1. During the initial introductory call, I focus on listening to the candidates and giving them detailed information about the company.
  2. Then, we ask candidates to solve a technical challenge. When they get back to us with their proposal, we ask them to explain their solution and the thought process behind it. At this point, we’re trying to understand how they work.
  3. Team synergy is consequential, so we make sure that each of our teammates has the opportunity to talk with the candidates. We only hire people if the entire team is comfortable with the new addition. 
  4. If a candidate doesn’t match our criteria, we always give them feedback. We explain their mistakes, how they can work on them, and what they need to learn. We happily offer a chance to reapply after a couple of months if they’re willing to invest their time and effort.

With this approach, even the interview process becomes a relationship-building experience. It’s not a one-sided selection. We focus on helping candidates, being empathetic, and even hand-holding when necessary. We carry this mindset throughout the onboarding process and into our day-to-day management vision. 

The Onboarding Process

Normalizing knowledge gaps: When someone joins the team, we clarify that it’s okay if they’re not familiar with the domain or lack some background knowledge. We encourage newcomers to ask anything—”there are no stupid questions,” we say.

Being generous with adaptation time: We allocate time to support our newcomers. We have online sessions with them. We engage in a lot of asynchronous communication, so individuals can go back and read over the correspondence. 

Furthermore, we don’t expect people to deliver from day one. You can’t simply make someone watch an onboarding video and expect them to get to work. We give newcomers as much time as they need to get familiar with everything and feel comfortable before diving into deliverables. Equally important is how we manage our team members in the later stages. 

The Management Approach

Giving ownership of the work: I have a very technical background, and I enjoy technical work. However, as someone in a leadership role, I avoid stepping over anyone’s toes regarding these matters. There’s knowledge sharing and advising, but beyond that I trust my engineers to do the work.

Explaining the reasoning behind our goals: Whenever we establish a goal, we clearly articulate why it’s important and how it impacts the business. This makes employees feel that their work matters and that they’re part of the journey.

Conducting regular check-ins: We do reviews to see if there are any gaps in our teammates’ responsibilities or any steps or procedures that have been overlooked. If we identify any, we inquire about the reasons and understand where they’re coming from. I’m proud to say that our engineers really care about our product—listening is a significant aspect of this, and it reflects in the quality of our delivery.
Providing flexible working hours: All our workers are remote, and they’re free to work whenever and however long, as long as they meet their deliverables. If a goal isn’t reached, we do a retrospective to understand why and how we can fix it.

Key Tips for High Retention

  • Don’t micromanage. Trust your employees and make sure that your trust shines through to them. The sooner you begin to build trust, the better.
  • Lead with empathy. Remember that everyone has different lives and unique sets of responsibilities. As a leader, try to be flexible in accommodating people’s varying situations.
  • When you lead with trust and empathy, your teams will become autonomous after a while. They will become more motivated and take ownership of their work, which is critical for retention.

About Author

Vimal Patel

Vimal believes in software engineering to control complexity, not create it. He designs and develops products that solve business problems effectively, keeping things simple and easy. He is a dedicated, disciplined results-driven leader. He has proven expertise in delivering solutions leveraging various technologies/tools. He is a DDD, TDD, Clean Coding and Design Pattern practitioner.