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How Startups Can Reduce the Employee Turnover Rate and Retain Tech Talent

Elizabeth Mackenzie
How Startups Can Reduce the Employee Turnover Rate and Retain Tech Talent

Employee turnover is a big problem for a startup. In the beginning, every company goes through an adjustment process, and finding the tech talent you need will take some effort. You must make sure to implement the best strategies to avoid employee turnover.

Increasing retention is crucial in saving money. You have to perform well on your projects and maintain a work environment with some stability. Applying the right strategies on time will help you focus on the growth of your startup without worrying about constantly looking for new talent to fill empty positions.

What is Employee Turnover Rate?

The employee turnover rate is a metric determined by the number of workers that quit or are laid off by a company. This rate is measured over a time period, usually one year, but can also be calculated monthly or quarterly. To obtain this rate, divide the number of employees who have left by the average number of employees working in that period of time. 

The employee turnover rate includes employees who leave for a variety of reasons. Both voluntary and involuntary turnover is taken into account in the calculation. It goes from transfers to other offices or departments. It also takes into account people leaving in search of better growth opportunities or better benefits.

Highest Employee Turnover Rates per Industry

There are industries that experience high employee turnover rates due to a variety of factors. Employees leaving companies are influenced by variables like working environment, compensation, and management. 

Below, you’ll see the top five industries that experience high turnover rates. The data is extrapolated from a US Bureau of Labor Statistics (BLS) report from April 2022. 


Employee Turnover (%)

Leisure and hospitality


Professional and business services




Trade, transportation, and utilities




The two industries with the highest turnover rates are both found in the service sector. Leisure and hospitality experience high turnover rates at around 6.5 percent. This is due to a wide range of reasons. Moreover, professional and business services have an average employee turnover rate of about 5.4 percent. 

The data doesn’t explain the real causes of these high turnover rates. However, it does posit that these percentages are possibly driven by poor working conditions, lack of proper compensation, and mismanagement.

Why Should You Create Retention Strategies?

You should create retention strategies because it helps with overall management and productivity. Employee turnover can be costly, especially if the rate is high. Retention strategies can mitigate these costs by providing an efficient system that can keep teams satisfied and happy.

A retention system can establish a strong foundation that safeguards the well-being of employees. It ensures that teams are provided with proper working conditions, remunerations, and training.

Five Strategies to Increase Tech Talent Retention

These five strategies that we describe have been thought about and studied to obtain higher talent retention in a startup. The strategies are especially aimed at tech talent that’s currently in great demand and that must not be lost in any company.

Tech talent retention is a cost-efficient way of making sure that employees are provided with the proper working environment, upskilling opportunities, and feedback systems. These can greatly help them in their careers and their time working for your startup.

Work Environment

You should ensure that the work environment in your startup has an inclusive culture. Inclusion and diversity must be prioritized to create a thriving environment in which every employee feels that they have the opportunity to grow and develop their career.

Women in STEM are one of the minorities that must be taken into account to have a diverse and inclusive startup environment. A diverse range of talent will make your startup promote the inclusion of talent from different cultures, genders, and backgrounds. This in turn will help you attract diverse tech talent in the future.

Providing equal growth opportunities to employees and creating an environment of trust is also a way to contribute to a good work environment. Communication for problem solving and teamwork for the development of all projects are also very important. 

Support Your Employees' Goals

Having regular conversations with your employees for professional growth will help you realize their needs and motivations to continue working at your company. Offering them honest guidance and providing them with opportunities is an excellent way to reduce the employee turnover rate. 

Skills enhancement opportunities through learning-intensive courses such as coding bootcamps are an excellent option for tech talents. Frequent updates are important to meet technology expectations. Furthermore, as new technologies arise, procedures and innovative ways exist to improve processes and systems.

Upskilling opportunities are a great way of retaining tech talents. These can provide them the avenue of learning new skills that can help them in their tech career journey. It can also help them improve their work output and productivity.

Offer Remote Work Opportunities

Remote work can bring many benefits to your startup, in addition to broadening the range of talent you can get from around the world. A remote tech job is a benefit you can offer your employees because it also gives them better work-life balance. 

There are a ton of tech jobs that are easily performed in a remote work setup. Data scientists, software engineers, and web designers are some examples of tech jobs that are usually done online. This remote work opportunity can provide them with flexible working hours and implement a proper work-life balance.

You can also provide a hybrid work setup if full remote working hours are not feasible. Mixed work setups are a good way to start before fully establishing remote work. Monitoring work is always important to ensure the good performance of each employee. It can also be useful to be attentive to their needs so that they can fulfill their work in a productive manner.

Create an Effective Feedback Loop

An effective feedback loop can create a robust communication line between employer and employee. Try to make coaching sessions, training, or workshops to help refine the skills of your team. It also provides a space where employees can ask questions and provide their input on various topics.

Furthermore, the feedback system creates trust and transparency. You can leverage this by reinforcing stronger ties with your teams. Meaningful relationships with your team can provide a solid foundation as the organization progresses forward.

Employee engagement is a key factor in establishing a feedback loop for proper tech talent retention. Proactive employees are a sign that they’re comfortable sharing their thoughts and opinions on a variety of subjects. These can signal to you their proactiveness is a sign that the effective feedback loop that you’ve established is working.

Develop Success Metrics

Success metrics measure the goals and actions that teams achieve within a given timeframe. These metrics can set expectations on workload and output. The delegation of these factors can provide accountability to the teams.

Milestones are a great example of success metrics. These are feasible objectives that are set by the team to achieve over a period of time. It can be a good benchmark to track progress and measure success.

Moreover, success metrics also allow you to highlight goals that need to be prioritized. This will make things easier in goal planning and improve overall efficiency in managing teams. Lastly, the metrics can provide a template that’ll guide you in making objectives. It can also help you with analyzing business decisions and opportunity costs.

Is it Worth Making Retention Strategies?

Yes, it’s worth making retention strategies for your startup. A startup has the early bird advantage due to its small size. On the other hand, huge companies may have trouble implementing retention strategies because of their large size.

A startup has the opportunity to scale these retention strategies as they progress and build over time. This can be advantageous because the proper implementation of retention strategies can save an organization time and money. It can also free up space for other business opportunities that can further increase productivity and efficiency within the organization.


The talent management strategies to follow to reduce a high turnover rate in a startup are easy to implement. However, they require the commitment of the employees and the startup leaders. The strategies are aimed at building a work environment where employees are listened to and get the opportunities they need to grow with the company.

The tech talent of a startup needs the support of their employers to develop as a professional. They also gain the opportunity to advance in their career. This is why skills and knowledge development strategies are essential. Coding bootcamps like App Academy are excellent development opportunities for them, which in turn will help you prevent them from leaving. 

Elizabeth Mackenzie
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