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Yes. Tenure for tech is relatively bad when comparing to other industries. But is that a problem? And if so, how do we fix it?
This and more we get into in todays episode
This and more we get into in todays episode
- (00:00) - Introduction
- (02:41) - After 3 years, half your team has moved one
- (07:02) - Boomers, millenials and different tenures
- (12:18) - The problem short tenure creates
- (13:10) - Employee Acquisition Costs
- (14:23) - The Hidden Costs of Recruitment
- (15:42) - Onboarding and Ramp-Up Time
- (17:53) - The Importance of Employee Tenure
- (20:43) - Strategies to Increase Employee Retention
- (23:14) - Analyzing Employee Churn
***
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Creators & Guests
What is The Revenue Formula?
This podcast is about scaling tech startups.
Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.
With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.
If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.
[00:00:00] Toni: Hey everyone, this is Toni Holbein. You're listening to the Revenue Formula with Mikkel and Toni. In today's episode, we're discussing why tenure is a problem and how employee lifetime value, I know you'll get used to it, might change your view.
[00:00:15] Enjoy.
[00:00:18] Mikkel: So recently. You know my son, he started school, all great when they're done with classes, they kind of hang out together, they can go play football, whatever. Recently, he picked up UNO. He picked up UNO. And
[00:00:37] Toni: UNO actually an international thing? Do people in the U.
[00:00:39] S.
[00:00:39] Mikkel: at all.
[00:00:40] I'm not, I don't know, but let's just say it's a card game, easy to play, also great with like kids in the early school years and even further I would say. I think it's fun to be honest. But anyway, we decided to get the game from for home and basically play it together, and I think this is the first time we could legitimately play other than super basic.
[00:01:01] Games, something we all found to be fun.
[00:01:05] Toni: Yeah.
[00:01:05] Mikkel: And we sit there in the end. It is a game of getting rid of all your cards first. And he has two cards left. And we kind of, you know, as a parent, you also help him try and like, this would probably be the best move for you.
[00:01:18] Toni: But you obviously advise him in a way that he loses.
[00:01:21] Mikkel: So he lost. Well, he came second. I lost. My wife won. And, and we thought all was great. He just, you know, great. We're done. Now it's bedtime and he leaves. And then he just completely melts down, and is like, You cheated me! I was gonna win! Now I lost because you did, uhhhh. It's like, oh man, learning to deal with losses, especially in games, it's like, wow, that's difficult.
[00:01:47] I
[00:01:47] Toni: I think there's also a lesson for you in there, Mikkel. It's like, um,
[00:01:51] Mikkel: let him win. Be
[00:01:51] Toni: be, be, be careful with this advice thing. Maybe, maybe you're just not good at that. Maybe you're just not good at this thing, you know?
[00:01:58] Mikkel: Uh, Yeah.
[00:01:59] Toni: Maybe, maybe, maybe that's a really good point. Maybe I was like, dad, that was really stupid.
[00:02:07] Mikkel: advice.
[00:02:07] I'm never gonna listen to you again. Yeah. Yeah.
[00:02:12] Toni: Dude, do we need a break? Can we maybe play the music one more time? Sorry. No,
[00:02:18] Mikkel: Let's just say his satisfaction with his direct supervisor, not great, not great. Like he did not appreciate the advice he got.
[00:02:27] So I don't know, maybe he's going to churn,
[00:02:31] Toni: Maybe, maybe he's going to churn. Maybe, you know, and that, that would be, that would be not optimal employee lifetime value right there. Not exactly. So,
[00:02:41] Mikkel: the funny thing is recently. You and I have been talking a bit about tenure. And the amount of, let's just say. churn, not on a customer side, but on an employee side that's going on, right?
[00:02:57] And it triggered me to kind of find lots of interesting things around the interwebs. And the first thing is actually just a question for you. I asked you original one and I had to change it because you just cheat. So what
[00:03:09] Toni: would play along,
[00:03:10] Mikkel: yeah, yeah, yeah, yeah. But then it wouldn't be genuine, right? So what company has the highest rating on Glassdoor?
[00:03:19] Is it Microsoft, Google, or Facebook?
[00:03:23] Toni: I think it's Microsoft.
[00:03:27] Mikkel: It is, in fact, Google.
[00:03:30] Toni: Oh, okay.
[00:03:31] Mikkel: Google. They have the highest rating. I think it was like 4. 2 4. 3, something like this. The others were around 4 and 4. 1. So they have the highest. But I also kind of, found another stat that I shared with you and that was the original question, which is, what is the Average tenure actually at Google.
[00:03:50] Toni: actually at Google? Yeah. Yeah. Yeah. And I was, I was saying, you know, you know, thinking about Google, guys put yourself into a position where you currently work at Google.
[00:04:00] Um, You know, the office is crazy. Everything is crazy. Compensation is good. Apparently, they're only. Highly intelligent people working around you. Maybe that's a minus.
[00:04:11] Mikkel: Yeah. I'm not sure.
[00:04:13] Toni: You know, and, and obviously kind of when you, when you go to a bar and say, what do you work? I work at Google,
[00:04:17] Mikkel: It's
[00:04:17] Toni: you
[00:04:18] Mikkel: oh, bow down to
[00:04:19] Toni: everyone, everyone can, you know, connect with that.
[00:04:22] So I was actually thinking they have, they're, they're going to have like a good average tenure. So I was guessing four years. Yeah. And that
[00:04:29] Mikkel: And that was not
[00:04:30] Toni: right. That was
[00:04:31] Mikkel: That was incorrect. Just to rub it in your face. Not fact checked. But I have a source and it's in fact 1. 2 years, which is just mind boggling when you think about the amount of money they invest in taking care of their team, training, development, salary, all that stuff, all the perks, benefits.
[00:04:52] That is actually crazy. Yeah,
[00:04:54] Toni: And, and, you know, with this, with this average tenure, you can take it a couple of different ways. You can ask kind of currently at Google, what's the average tenure? And that might be skewed by. than them having recently done a lot of hiring, for example, right? So this is you know, and then the other average 10 years, if you take like, well, how long does a person actually stay in the organization?
[00:05:15] Kind of, they're, they're kind of different ways to calculate this. And some of them are probably right and some of them are wrong. I don't know. But ultimately speaking, when you think about an average tenure of either of those two ways to calculate it
[00:05:26] Mikkel: calculate
[00:05:27] Toni: a company, what they must have like a hundred thousand employees or
[00:05:30] Mikkel: Yeah, probably.
[00:05:31] Yeah.
[00:05:32] Toni: Wow.
[00:05:32] Mikkel: Yeah. , it's a lot of folks leaving
[00:05:36] Toni: Well, like a lot of people just started yesterday contributing with zero months to this calculation. It's absolutely mind boggling
[00:05:43] Mikkel: Yeah. And I think the whole, the whole trigger for this conversation was, Carta shared a report they had BA basically analyzed tenure at SaaS companies, and what they found is after three years.
[00:05:59] Basically half your company that's like replaced.
[00:06:03] Toni: Yeah.
[00:06:03] Mikkel: which
[00:06:04] Toni: So which is, which is obviously kind of, I don't know, surprising, let's just say it like this, right?
[00:06:09] Mikkel: think we already always knew, right? We always knew if you are like us, if you ran something Cultureamp and you saw this, you know, how you stack up to different industries, it's just like, why is SaaS So terrible.
[00:06:22] Toni: So the thing is, right, we always know that like an S and SDR in the role, you have an average tenure of maybe a year, year and a half, right? We know that, but that sometimes means you, you know, you're leaving that role and joining a different role in the same company. So you're kind of your company. tenure is further increasing, right?
[00:06:40] We know that as an AE, you're probably going to stick in your, has, have been, like going to be in your job three to four years. If you run out of those numbers, you get to similar, similar results. I think what I found surprising and shocking is that, that apparently also, Isn't quite different for all the other roles in the organization, right?
[00:06:59] And I think we did some additional digging overall, right?
[00:07:02] What, you know, if, if you look at the, the labor force in the US, like if, if you, if you look at this, so basically the average tenure has dropped from 4. 7 years to 4. 1 years. Kind of, that's, that's a trend in one direction, but I think the, the double click below that, It's actually really
[00:07:20] Mikkel: If you
[00:07:21] Toni: If you, if you unblend the number, if you don't get fooled, if you don't get fooled, if you unblend the number by what is called generation basically, right? And we're kind of looking at the boomers, the millennials and the Gen Z. Yeah, exactly. You're Gen Z obviously. Mikkel knows what TikTok is, so therefore he is Gen Z.
[00:07:38] No, but the boomers have an average tenure of almost 10 years.
[00:07:44] Mikkel: Yeah.
[00:07:45] Toni: Nine
[00:07:46] Mikkel: think about that.
[00:07:47] Toni: Nine something.
[00:07:48] Mikkel: In SaaS years, that's like 50.
[00:07:50] Toni: Yeah, it's like 10 unicorns. Then millennials of which basically kind of, you know, if we've run the math, you and I, millennials, 2.8 years.
[00:08:00] Yeah. Average tenure
[00:08:02] Mikkel: of, kind of, nah, I was six years at Falcon though, but yeah. You were also pretty long at Falcon, by the
[00:08:07] Toni: way. I was seven years at Falcon, but then at plan day I was like, not even two years.
[00:08:12] Mikkel: Two months. Bum, done.
[00:08:15] Toni: And then Gen Z is 2. 3 years, right? And, and the first thing that kind of went through our head was like, okay, you know,
[00:08:23] Mikkel: Easy fix, hire boomers. It's like, okay,
[00:08:29] Toni: you know, kind of grappling with this fact here a little bit. And and the first thing that came to mind for me was like, you know, yes, I have a little bit of statistics.
[00:08:37] Mikkel: bit of a statistics education. You took that one course.
[00:08:41] Toni: I, I, the thing is because I studied business and psychology, I kind of had like five times, I had statistics one on one basically like five times.
[00:08:49] So it's, at some point it kind of sunk in, I guess, but you know, the first thing I was like, okay, is this the real reason kind of, you know, they're basically the generation or is there something
[00:08:58] Mikkel: Lurking bias.
[00:08:59] Toni: Basically you're thinking like the sun is out and people are buying more ice cream.
[00:09:04] That is like a direct connection. That makes total sense. But you could also, you know, maybe you don't know about the sun. Maybe that's just not there for you. And you only see people in shorts and ice cream sales, right? You could say like, Oh, you know, you know, if, if people are wearing shorts, you know, more shorts means more ice cream sales, but actually both of them are dependent on the sun being out.
[00:09:26] Does that make sense? So, and, and basically kind of, when I look at this generation kind of thing, I'm like, Is this the sun in this argument or is it the shorts basically? And, and, you know, I think we kind of discussed it a little bit. We, we probably figured out as kind of a little bit of both actually,
[00:09:41] Mikkel: Yeah, there's so many things. I think my rationale was, I kind of looked at Bart on our team and I said, look, you and I are in different places in life. You could probably You know, just risk it and take another job if someone offered it to you. But for me, it's like very different. I have like a mortgage, a car that needs to get paid, three kids, a wife, hobbies.
[00:10:04] There's all these other things. So I'm way less prone to take that risk of switching jobs, right? So I think there's something like that. And then also when you think about just graduating from university or college or whatever it is, and you're about to take your first job, you don't know if that's going to be it.
[00:10:21] Right? You could end up in a bank and realize, you know what? Banking is boring. I want to do something like, I want to,
[00:10:28] Toni: told you before. Yeah, but
[00:10:30] Mikkel: I want to do something else. Right? So, so there's all these kind of things at play, but
[00:10:36] Toni: I think from my perspective, just kind of interject here, like one is like, yes if you're early on in life, you will have more junior roles and the turnover of those will be higher.
[00:10:44] Also, you don't maybe know what, you know, what you got yourself into. I think there's the fewer roots, you know, pinning you down. You know, it's like, you know, I live in New York today and tomorrow I get a job in Austin. Okay, bye. I'll take it. I'll take a flight. Thank you very much. Can't do that when you have a family and kids go to school and daycare.
[00:11:02] You can't do that anymore. And I think then the last one, especially for the boomers, it's like you know, I think in our industry here and I'm saying this on, you know, on, on tape here and, you know, hope it doesn't come back I think once you're crossing to 50 and older, like I I think it's going to get increasingly harder to find the next gig.
[00:11:21] So yeah, I think you're going to be way more prone to just stick it out. I just kind of just stay there and kind of, you know, build, build yourself a kind of a good, happy base there. And I think what's what's happening also kind of in our generation. So a good friend of mine, he's currently looking for you know, he's in SaaS, been successful in SaaS.
[00:11:38] He's now at the point in life where he's like, you know what, all of this SaaS craziness, all this startup craziness, I think I had enough of that now. I'm going to go and apply for a big corporate
[00:11:50] Mikkel: Like,
[00:11:52] Toni: you know, I want to be a project manager at like Novo Nordisk or at Maersk or at Carlsberg or something like this.
[00:11:57] Right. Kind of here in town. And that makes total sense. Like it makes absolute sense to kind of go into this thing. Right. And, and the second you leave technology and go to a more established organization, I think unless you, You know, switch off yourself, I think your tenure will be much longer than two or
[00:12:14] Mikkel: it was. Yeah. So we could talk about this for hours and hours.
[00:12:18] What is actually, you know, let's talk a bit about some of the problems with the tenure. What problems does it create? Right. Because people are always going to leave. At the end of the day, it's just a matter of time.
[00:12:29] But what problem specifically happens for a SaaS company as they need to scale and grow and, you know, hit that trail?
[00:12:35] Toni: And because we have the revenue formula,
[00:12:37] Mikkel: We know.
[00:12:38] Toni: we, we can calculate this,
[00:12:40] Mikkel: no.
[00:12:40] Toni: but the the, the way, you know, I would encourage people to look at this. So now, now that everyone is getting how we're thinking about the funnel and actually the bow tie and how the math works and so forth think about employees as, you know, as you're currently thinking about customers.
[00:12:57] And think about instead of customer lifetime value, think about, about employee lifetime
[00:13:02] Mikkel: lifetime
[00:13:02] Toni: Lifetime and employee is actually really bad mix. Let's just say employee tenure value or something
[00:13:06] Mikkel: like that.
[00:13:07] Do you think about whether
[00:13:09] Toni: Yeah. Like that's not cool.
[00:13:10] But anyway, kind of try and kind of put it into the same context there a little bit.
[00:13:14] And then, you know, you will realize a couple of things. Number one finding those employees. It's actually a lot of work. Like, you know, that's the acquisition cost right there. And you know, when you, when you run the numbers you know, you can outsource getting an employee to an agency basically, and they will charge a 20 percent plus minus first year salary.
[00:13:35] And they're landing at this number, not because they kind of, Oh, you know, that's fully loaded. That's probably just a little bit above of what you're going to pay. Like, that's probably what it is, right? So let's just assume every single person you hire Let's just say you're super efficient, have a great employer brand, people just, you know, run to you.
[00:13:56] You don't need to do lots of top funnel works, lots of organic traffic, so to speak. You can get it done for 15 percent of the you know, first year salary of that person. Just math it out how much
[00:14:07] Mikkel: money, like
[00:14:08] Toni: Like math it out and, you know, how much money that could be spent on product development on you know, your salary or whatever, you know, whatever else.
[00:14:16] So this is, I think the acquisition costs you would need to be thinking about a little bit and that's kind of the obvious first kind of minus, right?
[00:14:23] The next minus it's not, you know, when you use a recruiting firm to, to, you know, get you that employee it's not only that they need to do work and you pay them money.
[00:14:34] Each of these recruits, however efficiently you want to, you know, organize this funnel needs to talk to hiring managers and sometimes, you know, several of them and or even further up the chain. Think about how much, you know, for one role, how many management hours need to be spent on hiring one role successfully,
[00:14:56] Mikkel: Yeah. Right.
[00:14:57] Toni: And maybe you kind of, shortlisting five folks. Like, you know, this is five hours right there, but then you have second and third round interviews. And it's like, it's a, it's actually, when you think about, you know, this being managers, sometimes VPs and directors, this is, those are expensive hours. And not only are those hours spent on you know, recruiting the next person, they're also just, you know, opportunity costs of, I could have spent this also on an employee and kind of, or a deal or whatever you want to do. So really the, the total cost of acquisition is. Quite a lot higher than you think. Just, just on that part, doesn't we, we're only talking left side of the bullseye, the marketing and sales side, basically
[00:15:38] Mikkel: basically. Not Cox.
[00:15:39] Toni: No, not COGS yet. No, no, we're not even there yet. Right.
[00:15:42] Then the next thing is you know, the onboarding cost, like someone needs to sit there, teach you all of this stuff.
[00:15:48] And then, you know, really, and this is kind of the, the, the main question. I think we're going to dive a little bit more into it. Like. Yes, we have all of these things like, Hey, an AE should be fully ramped after six to nine months. There's some math behind it. How, you know, depends on your sales cycles, blah, blah, blah, blah, blah.
[00:16:02] blah, But honestly, kind of think about when does an employee, and this will differ per role, but when do they reach peak performance? When do they actually fully get up there? Right. And I would say while an AE can have a fully ramped quota after nine months or six months or whatever, he or she probably isn't going to be part of the top leading pack at that point in time.
[00:16:29] Mikkel: point in
[00:16:30] Toni: Like the real ramp, the real ramp is actually longer. And, and this is just something that we know from AEs. You can translate that to any other role in your business. And you know, I was kind of, when we were kind of discussing this previously, I was basically kind of making like a, like a comparison.
[00:16:47] Let's just say you are, let's just say in a big organization, it doesn't need to be corporate, but let's just say you're kind of in a big organization and it could be something like revenue operations, but screw that for now. It could be some kind of a project management role, some kind of a role that nets to kind of, you know, get shit done between departments or something like this.
[00:17:04] Just think about the organizational and relationship capital that needs to be built up by that employee to be actually successful in that role. Like, think about
[00:17:15] Mikkel: this. Yeah.
[00:17:15] Toni: right? Like, oh, here, Mikkel, here's a, here's a project, go and execute. It's like, you could probably, you know, write the project plan extremely well, you can do all the things extremely well and, you know, all of that, but you wouldn't even know Whom to talk to and to talk about what and how to persuade them and how to kind of network you.
[00:17:33] It's like, that's going to take years to get to this point. Right? So really trying to honestly think about what's the true ramp up behind getting an employee successful. And what's so shocking when you really think about it, could this maybe be longer than two
[00:17:50] years? And and the average tenure is two years.
[00:17:53] Mikkel: Yeah.
[00:17:53] Yeah. But it's, but I think that's the mind, mind boggling part. And I did trying to find, was there any research concluding on the job performance? against the job tenure. And it's, you know, dubious. It's kind of mixed, right? But I think logically, it does make sense. Some things get easier, you know, where, what is, who does what, who to talk with, and, you know, who the customers are, what they truly care about, what are great, you know, a bunch of things you, you will truly know.
[00:18:24] After like a year and it, it varies. Like if you're in product and you have a super complex setup and blah, blah, blah, there's still going to be lots to learn. It's going to take time. Right. And I think that's, that's just super important to be aware of, but then at some point they're ramped and they're going to make an impact, which is, I guess, plus column side, let's, let's get into the plus column for a second here.
[00:18:44] Right. And I think the tricky part is it's truly going to vary depending on what department we talk
[00:18:52] Toni: Yeah, no, for sure. And I think the you know, if you take this, you know, a little bit further here because it, it doesn't make sense to just for the sake of it, not fire anyone.
[00:19:03] That also, you know what, that also doesn't make sense. Right. So it's not, Oh, we need to optimize that, that number and therefore we will be better. But and we'll get into like, you know, how would you be going about this actually? But another thing to kind of consider is actually also if you, if you think about again, kind of the revenue formula thinking, if you think about the bowtie and kind of the, the employee tenure kind of reaching through this, there's also.
[00:19:28] You know, every employee probably has, at least in the go to market, has a role to play in that bowtie.
[00:19:34] Mikkel: Yeah.
[00:19:35] Toni: And if you, and everyone knows that example, but I just want to have you folks think about it across the whole bowtie. If you have an AE that's fresh, will his or her conversion rates be higher or lower than, than the average?
[00:19:47] Right. And the, the answer's probably going to be, probably going to be lower. And actually kind of, if you were to map it out. There could be even a correlation between tenure and their, their, their conversion rate, their success basically in the role, right? Meaning if no one is actually reaching
[00:20:05] It's actually reaching kind of those higher tenures, this, this will basically result in a lower throughput efficiency, like in, in that closing role.
[00:20:14] But that's also true for CSMs. Think about a CSM sitting there two, three months into the job, fully onboarded, onboarding completed but having a really difficult customer conversation. Do you think that he or she would be better at, at handling this than someone that has been in the job for two years and has had that conversation 20 times already.
[00:20:31] It's just so super obvious, right? So besides them, you know, there being some cost, I think there's also a bunch of missed out money and revenue basically by, by having this not fully under control.
[00:20:43] Mikkel: Yeah and you and I also spoke a bit about the whole, the reason you want to have longer average tenures at the company is also, you want to have a leadership pipeline as well. This is, this is the most important hire you're gonna make.
[00:20:57] If you hire a leader of a team or a department, if you hire the wrong person, you risk the entire team. Right. So not only is it super expensive, because again, you need a lot of senior folks involved, you will need potential recruitment. It's a longer cycle, high pay. But it can also screw up the team, right?
[00:21:16] Versus internal promotions, usually, you know, you don't have the recruitment cost, definitely as a salary negotiation, right? But it might not be the same step function as going externally. And you have way more comfortable predictability whether that's going to work out internally because the person knows the team.
[00:21:36] And sure, that's going to be the classic, well, Person B thought he was going to get the promotion and went to her and, you know, now there's a conflict and sometimes you can't manage through that and someone will try. It's always going to be the case when there's a new leader, right?
[00:21:48] Toni: And also sometimes you just need some fresh blood coming in from the outside.
[00:21:52] Like there, there, you know, I always kind of was thinking about, you know, building the team in a, in a balanced manner, right? Kind of, you want to have some OGs that have been there and kind of, the successor of like, Hey, he started as an SDR and now he's a VP of sales, right? You want to have that, but at the same time, you can't just, you know, stir the same pot.
[00:22:11] You want to kind of add some new things to it, right? Sometimes it was like, well, a really healthy forest. It's not just one kind of tree. It's like a lots of different trees, right? And I think, you know, the same kind of applies here for, for culture in general, but also for, you know, being successful, finding the best solutions to that.
[00:22:27] Right. So what's, what's the answer to the whole thing, right? Kind of, we build up the problem, the problem is massive. You can probably, you know, bunch like 10 unicorns into trying to kind of solve this thing and they are probably trying to solve it. But like, if you were to kind of try and, you know, figure this out and dumb it down, right?
[00:22:43] So I think from, from our perspective, What, what, what I'm, what I'm kind of thinking here is really You know, how can you increase your employee tenure value? , And basically, you know, it's not about upsell and, you know, it's, it's not, it's not how this thing works. It's basically either you retain or they churn.
[00:23:02] Like those are the two options here, right? It's the age old question. So, you know, why are my customers churning? Well, you know, think about that for a minute. But then also ask the question, well, why am I employees churning?
[00:23:14] And on the employee churn side, you know, some people talk about you know, regretted, unregretted customer churn, but I think there's all BS.
[00:23:22] I think it's all BS.
[00:23:23] bs But I would say it's fair to say on the employee side, you truly have regrettable and unregrettable churn, right? You have people that you wanted to leave for whatever reason, and then you have people that are leaving that you really actually didn't want to have leave,
[00:23:38] Mikkel: Yeah.
[00:23:38] Toni: And number one, I would probably start tracking that just to get a feel for what's going on. And, and that can already kind of point you in some really good directions. If you have a lot of unregrettable churn. You probably didn't acquire ideal employee profiles.
[00:23:56] Mikkel: Are we taking this
[00:23:57] Toni: I think we're taking a little bit too far, but you probably didn't acquire the right person here.
[00:24:02] Right. And this might be because of you attracted the wrong candidates or your, your hiring process is flawed, or you actually don't have a good understanding of what the role is and kind of whom you need to hire for this. So there might be a couple of things to kind of dive in here, right? Kind of what are we doing wrong?
[00:24:17] Here, and this is again, this can be, you know, if you, if you look at this in a completely unblended world. That will be much more insightful than not, right? So the first, you know, dimension you want to split by is regrettable, unregrettable, but then the next dimension down, you want to see is like, well, and which team is it, right?
[00:24:35] It could be that you have a lot of you know, unregrettable churn in one team, and then this is where you need to fix it. This is where you need to work on. Right. So this, this would be the unregrettable churn side, right? Think about kind of what's going wrong there and be honest with yourself. So the thing is you know, putting someone regrettable, unregrettable, this doesn't need to be someone quit and someone got fired. It doesn't need to be like this.
[00:24:58] It could be that someone is quitting and you were
[00:25:00] were trying to, you know, heard this along a little bit. And Boom, you know, finally they, they kind of left. So, so there's some flexibility in you defining that stuff, but also don't cheat yourself, like don't, just don't do that. It's like, it's so easy to be like you know, once someone then kind of quit, it's like, ah, yeah, no, this was the plan all along, right?
[00:25:17] Kind of, I think that's BS. So kind of trying, trying to be, you know, as truthful as possible here. And then, you know, if you, if you then see, you maybe have a lot of regrettable churn. That's a completely different thing. Suddenly, this is not about the acquisition of those folks. Suddenly, it's about like Well, why are they leaving?
[00:25:34] Right? And the, the first best thing I can just recommend to everyone is just literally go and ask them, right? Go and have an exit interview. You probably should have this with everyone for kind of other reasons, but especially those you want to know, right? And don't do it on the way they quit and the day they quit.
[00:25:51] And maybe it shouldn't even be the manager that is having that conversation. Maybe, you know, in this case, it should be someone from HR. Maybe you meet in a cafe instead of at work. Maybe you do it three or four weeks after, you know, some of this has cooled down just to get also the emotions out and kind of the, Oh, you know, I needed to tell the story, but, you know, after a month people don't want to tell the story and they just tell you what was up.
[00:26:13] And, and this is where you're probably going to learn some hard truth about, you know, why these people have moved on.
[00:26:18] Mikkel: I think that's also where you can figure out, potentially, because that person had a network, and still does, at the job they left, it's like, hey, are there anyone else you see that's at risk? Because also sometimes what happens is, developer gets an awesome job offer for a company that's further ahead.
[00:26:36] They can offer a more competitive salary, that person will talk with the rest of the team. There's some mitigation strategies and stuff you can also consider, right? But I have at least experienced that often what you're going to find when you have that conversation, it's like, did not like the manager?
[00:26:52] Did not like the pay or did not like the career prospects, right? Because, Hey, there's this person above me. There's no room to go anywhere. Now I'm in another place, right? So there's going to be different elements and some you can do something about and some you can't, right?
[00:27:08] Toni: And so that's, that's how, you know, that's how we kind of approach this whole thing. Right. And then you know, once they have figured some of these pieces out and really a good way to think about why people are moving on.
[00:27:18] And I'm not an HR expert, but I've been, we've been thinking and talking about, you know, sales motivation and, you know, and, and, and you know, compensation and stuff. And there's this, what is it? Pinkman, there's Dave, Dave Pinkman with drive or something like this. Dan,
[00:27:34] Mikkel: drive. Check out
[00:27:35] Toni: I got it. I got it. It's probably going to be the link in the description,
[00:27:38] Mikkel: Yeah. And a picture
[00:27:39] Toni: And, and And he talks about, you know, mastery and progression and kind of those kinds of things. And you know what, yes, he wrote it recently and, or five, 10 years ago, whatever. But, but these truths are, have been true for like millennials probably, right? Kind of, it's been around. And especially the, the ones that are regrettable churn they probably were lacking on some of that area.
[00:28:01] Yes, it might be salary. Sure. And you know, that's, that's, that's An easier fix you can say, I think what's, what's harder to fix is like, well, I just, you know, I was fairly paid for my current position and I actually didn't want to have more money, you know, that's all fine, but I just couldn't see my trajectory to progress.
[00:28:20] To another position that yes, then it would give me more money. Right. And you know, I, I just didn't see that I was actually, you know, moving closer to my long term career goals. You know, I was, I was stagnating in my role. I wasn't learning something new. I was not adding kind of them at all of these, these kind of reasons.
[00:28:37] Managing that is really hard. Like it's really hard, right? Especially if you're in this. You're kind of trying to run a factory, run a revenue engine, like we are all, you know, saying you should. To a degree every person's individual wishes. They're kind of a hindrance. It's like, just keep doing your job.
[00:28:57] You're great at your job. Don't do any other job. Just do this job. And you know, forever. And I would be happy about it. But that's obviously not how it works, right? Because then you will, you know, lose them. And I don't want to go into all of this, like, leadership and management piece. But while all of us, maybe it's just me have this like, hey, you know, it's difficult to manage this whole thing overall.
[00:29:17] Managing kind of all the people issues, making it even more difficult. Yeah. Well, you have to, because otherwise all the other pieces will, will just not fall into place. Right. And, and what's going to happen is your tenure is going to go down. That will have an impact on literally every single stage in your funnels throughput.
[00:29:32] Like every conversion rate will be affected and not to speak of the massive amount of costs you need to do in order to hire all of those folks in initially. Right. So that's kind of the, the bigger picture we wanted to paint kind of, and. And actually kind of enabling people to think about this problem.
[00:29:49] That's 1000 percent a problem for you right now. How this is impacting your revenue engine performance. And I would say maybe in some clunky ways, how you can apply some of that revenue engine thinking in order to solve this problem.
[00:30:03] Mikkel: That's it. So I think this must have been a first talking about, let's say the softer side.
[00:30:12] Toni: Hey, I think we had one or two where we said this half the site, but I think it's, no, I think it's, it's I think it's an overlooked thing,
[00:30:19] Mikkel: honestly. Yeah. No, I agree. I agree. And maybe we should do a bit more of this stuff if you liked it and think we should send us an email to podcast@growblocks.com and we'll definitely consider hopping a bit more into this.
[00:30:29] Yes, if anything else, thanks so much for listening. Hope you'll leave a review. Five stars, 10 stars, like subscribe, anything to help us grow the show.
[00:30:38] Toni: That's it.
[00:30:39] Mikkel: Toni,
[00:30:40] Toni: Thank you Mikkel. Thanks everyone for listening. Have a good one. Bye bye.
[00:30:42] Mikkel: bye.