Written By
Marissa Peretz

02.22.17

What Can Uber Learn about Employee Retention?

A former Uber engineer just described a harrowing year at the company and a subsequent exodus of talented female engineers, impacting employee retention.

Why is employee retention important?

As recruiters, our goal is to place every candidate in a position where they will love their work. And we have a special place in our heart for tech companies and startups. So when we hear that someone worked at a prominent tech company, only to discover that their dream job was actually a nightmare, it inspires us to take a closer look at how companies can retain talent and foster respect among colleagues. 

How does voluntary turnover affect company profitability?

Higher turnover, especially when candidates are highly qualified, costs companies a lot of money.  A study by the Society for Human Resource Management said that employers can spend as much money finding and training a replacement for the departed employee as the new employee will make in six to nine months of salary. That means replacing an employee whose salary is $150,000 can cost the company $75,000 to $112,500 (not including the new employee’s salary). And then there are other, less overt consequences that we see time and time again as recruiters. One of the top reasons that candidates reach out to us for a discrete but expedited search is that other talented people are leaving the organization due to mismanagement, favoritism, or a toxic workplace. Some people who seek their next opportunity have family and financial obligations, like a mortgage or young children, that require them to secure a new position prior to leaving their current job. Others have the financial means to quit without landing their next job. And when multiple, high level employees quit around the same time with or without a new job offer in hand, it can send a message to potential future candidates about that company’s ability to manage and retain top talent.

An obvious toxic environment is one issue. Company-wide distraction from key goals is a separate but related one. After all, what happens when employees within a company are divided against each other instead of united against competition? Competitors love it. Because it gives them the opportunity to forge ahead with new innovation or faster growth as the divided company is too busy with internal drama to notice. Should Uber be concerned that Lyft insiders recently predicted that underdog Lyft may reach profitability before its giant rival Uber? Probably.

How do we fix corporate culture?

The solution starts with a foundation of respect for the people you hire. Know that the reason high performers take jobs at a specific company is because they want to help that company succeed. After all, the better the company looks, the better the individual performers within it look, because they are each contributing to a team effort. The company and an individual’s career both benefit from this arrangement. The people we have recruited in our decade of experience prove this point. So giving people the resources, autonomy, and respect that they need is a win-win.

Transparent, clearly communicated, and merit-based evaluation metrics are a key factor in a functional and respectful corporate culture. If employees know what steps they can take to ascend to the next level, and what steps their coworkers took to get promoted, they are more likely to respect evaluations. When there is nothing to hide, and the path to a goal is clear, top performers will often exceed expectations as their intrinsic motivation to succeed can propel them forward.

That does not mean that we have an exact roadmap of how to be a perfect manager (or employee). Whether someone is managing a small, medium, or large team, it is expected that issues will arise. Employees have diverse experiences and backgrounds, so communicating can be delicate. Sometimes the best of intentions have the worst results. That is why open, honest, and professional communication is important. When employees feel comfortable giving feedback to their peers, managers, and appropriate channels, then an issue can be addressed before it affects morale or before a high performer decides to leave for a competitor.

A relatively easy test is to be mindful of the way your actions are perceived by others. For instance, before you email, text, or instant message a coworker, imagine how that person might receive your message. If your roles were reversed, and that person was your boss and was sending you this message, how would you react? Would you feel uncomfortable? What about if this communication were intercepted by your parent or significant other? What would you expect them to think? What about if someone ended up reading this aloud in court? Does it still seem like a business as usual conversation between two colleagues?

For as long as people have worked in companies, there have been great positive experiences and challenging ones. In order to keep up with other innovative companies around the world, we owe it to ourselves to create a collaborative, highly functioning environment for our coworkers and employees.