By Stefan Klumpp and Gareth Platt
In a world where 1 in 4 employees quits within 90 days, how do you hang on to your best and brightest? Software company Mobile Jazz has come up with a winning formula which any company can follow – even if they don’t have the financial firepower of Facebook or Google.
At a time of near-full employment, with a booming gig economy and a scarcity of digital skills, it’s becoming harder and harder to cling on to talented staff. Research from LinkedIn shows the average global staff turnover rate is now 10.9 percent, and over 1 in 4 employees quit within the first 90 days of their new role.
For employers, this trend is potentially disastrous. If someone new quits, it paints a picture of discontent within the company and can destabilize more senior employees. If the resignee is a long-standing member of the team, they take a huge bank of knowledge with them, which will take months if not years to replace.
So it’s crucial that today’s firms do everything they can to maximize employee retention rates. For companies such as Mobile Jazz, this is doubly important; we’re trying to establish ourselves in the technology sector, where competition is at its fiercest. We went fully remote last year, which could have presented an additional challenge, as many people still believe that in-office jobs offer greater security.
We’ve put a dedicated staff retention system in place, drawing on the advantages of being a distributed company, and the benefits are clear. Most of our employees have been with the company for five years or more, while the average stay for people in top tech companies is only 2.1 years. None of the people who were with us when we became a fully remote company last spring have decided to quit. They’ve supported our vision and bought a ticket for our journey.
Personal growth
Why are people so keen to stay with us? Well we pay a very good base salary, but we certainly don’t try to compete with the giants of the tech world, the Googles, the Apples or the Facebooks. Thankfully we’re living in an age where people are less motivated by money than their predecessors, and we feel we’ve built a seriously competitive offering, full of additional benefits that improve our people’s day-to-day working life.
A lot of companies, particularly in our space, have gone down the ‘whacky’ route to building their culture. They’ve installed all kinds of novelty furniture, from ping-pong tables to Arcade machines. But, even when we had an office, we didn’t do that. If you go online and find out what today’s tech workers really think about such gimmicks, you’ll understand why.
Instead of cheapening our employee experience with novelty fads, we’ve given our team something they actually want: a personalized growth path which lets them develop within the company. We’ve read reams of research that emphasize the importance of career paths, both in meeting the enhanced expectations of the modern worker and creating a sense of agility within the company. That’s definitely something we’ve seen, too.
We sit down with each team member and map out what they want to achieve, as well as the amount of responsibility they want to assume. Some team members want to lead projects; others, particularly those with young families, often want nothing more than to organize a talk or event. But whether someone wants a step up, or a step down, we try to make it happen.
The idea is to ensure that everyone is constantly reevaluating their goals, and the company structure adapts to its people. We don’t want a rigid old-fashioned hierarchy, where long-standing employees are stuck in high-level positions and blocking the path of people ready to take over.
The growth path has a clear financial angle. We use it as a basis for our quarterly dividends, drawn from the company profit margins, and as a baseline from which to gauge special achievements. If someone goes above and beyond the objectives outlined in their growth path, they’re likely to receive a bonus. But it’s not really about the money; the growth path is a key part of the structure we’ve built for the company.
Two-way responsibility
A lot has been written about the bossless workplace, the growing shift away from top-down management systems and towards flexible environments built on self-responsibility. We don’t think it’s quite that exaggerated – you’re always going to need leaders to preserve the values of the organization. But we’ve definitely strived to build a fluid, flexible structure in which people are given ownership of their ideas.
At Mobile Jazz, we don’t have dedicated project managers. Like a lot of tech companies, we’ve found that agile working requires pop-up teams for each new project, each with its own leader chosen on the basis of skill, not title. This carries a major commercial benefit – the more agile you are, the more successful your projects will be – but it also provides a cultural benefit, by empowering each member of the team and encouraging them to push for leadership roles.
We expect everyone to react positively to this structure, and assume responsibility. If an urgent email comes in from a client, we expect someone to jump on it even if it’s not their direct contact. But we also reward our team, and let them know we trust them. Each member is given the right to work flexible hours and take as much holiday as they want. If they want to take a break and it won’t disadvantage our clients, then it’s ok for us. If they come up with an idea for a great piece of software, we’re happy to let them build it on work time.
Combined with this, we’ve developed a program called MJ University, which is designed to complement the Growth Path. We ask team members what they want to learn, and pay for them to study the appropriate course. This has clear advantages for us, as we’re constantly up-skilling our team and getting the jump on new technologies. But the benefits go way deeper than that.
Our culture of trust has played a massive role in retaining our people. Studies have found that a majority of employees identify trust as a key reason to stay, or leave, a company. Mobile Jazz is living, breathing proof of that correlation. The evidence also suggests that workers who are treated like adults are more likely to go the extra mile for their company and act as an ambassador, both internally and externally. This creates a virtuous circle, leading to a vibrant atmosphere which everyone wants to be part of.
Strong culture
Yet perhaps the most important part of our strategy is the culture we’ve created. Today’s young workers – the ones who make up the bulk of the tech workforce – are strongly motivated by mission, the desire to work for a company with a genuine sense of purpose. We try to fulfil this desire as much as possible.
We’ve been lucky enough to work on several socially focused technology projects including Worldreader, an app that promotes literacy in the third world, and MyMoments, an image-editing software for vulnerable people. To complement this, we actively encourage our people to work with charities, and even match their donations (we also blog about our team’s charity work as much as we can). Many of our folks take on marathons and other challenges for charity, and they do so with our full backing.
Another key aspect of our culture-building initiative is language. We’ve referred to ‘our team’ and ‘our people’ several times in this article, and that’s no accident – we never call them ‘our staff’ or ‘our employees’. We want to show everyone that this is a community rather than a company, a collective of talented people working together to take on inspirational projects.
Indeed we try to ensure that, even though we work remotely and are spread across several different countries, we still have a real family vibe. We’ve got dedicated Slack groups to chat during the day, and we actively encourage our team to plan trips on their own and visit each other wherever they are in the world.
To back this up, we hold multiple workations per year. As well as being a reward for our team (we hold the workations in fun, exotic destinations and it’s all fully paid), these trips reinforce our identity. We started out as a group of friends who wanted to work together, and, if we want to retain our people, we need to retain this spirit.
There’s plenty more information about our employee retention strategies in our recently published culture book. But we hope there are plenty of useful takeaways in the material we’ve provided.
We’re not saying our strategy is perfect – we once had to part company with someone on their first day, because we knew we’d made a major mistake in the hiring process – but we feel our retention record speaks to its success. We see how this approach yields positive results for more and more companies, regardless of their size. So much so that we have seen a profound change in the way both employees and employers attend and interact in the labor market during this century. For example, websites such as JobSage are dedicated to connecting job seekers with companies that actually walk the talk. If you create a company which works for your people, you’ve got a better chance of keeping them – even if you don’t have the financial resources of a Google or Facebook to sweeten the deal.
Author the Authors
Stefan Klumpp is an entrepreneur and investor who founded Mobile Jazz in 2011. He has since steered the company to seven-figure turnover, working with companies such as Airbus, Skyscanner and AVG. He previously worked on Stanford University’s driverless car project and is a prominent figure in the global startup community, thanks to his role as co-organizer of TechCrunch Mobile in Barcelona.
Gareth Platt works as a consultant with Mobile Jazz and has previously worked with a number of prominent business titles including The Wall Street Journal and Dow Jones Newswires. He blogs regularly on the subject of telecommuting and the future of work.
