Whenever I go out to meetups and conferences, fresh out of college graduates and entry-level engineers always have a few questions to ask me. I try as much as possible to not give them advice that would influence their decisions by my bias.
But, there is always one question that I find is becoming sort of a pattern. “I am about to join company X and I would like to know whether it is a good decision or not.” or “I have offers from Company X and Y. Which should I pick?”
Till a few years back, I used to give very generic advice to these questions. Asking about the products and teams they would be working on and telling them how to decide. But in the past few months, along with the other questions, I have told these young engineers to ask this one question to their team head/hiring manager and the founder of the startup.
What’s your attrition rate?
This one question would give you a fairly good idea of how the startup or the team you are considering to join is performing on a person-to-person level. And how the founders are taking care of their employees.
People in sales and marketing know this saying “It is a lot more expensive to acquire new customers than to retain existing ones.” It is the same for employees too.
As engineers and employees, we see only the salary we get paid from the company. But there are at least 2x costs that the company pays for each employee — in terms of getting people in for interviews, providing an offer, paying the consulting firm for hiring you. And there are numerous other non-monetary things like onboarding to the team, training, making sure there is a right cultural fit, etc.
Retaining old employees and making sure they are happy and content is much easier and simpler than getting 2 new hires to join. And most of the times it is not just paying higher salaries. A lot of employees would be happy with better working conditions, ergonomic chairs/desks, working remotely, etc.
Why did the last person in your team leave?
If a company has a high attrition rate, it means that the employees are unhappy with how the company is being run or they don’t like their team or the products they are working on isn’t challenging enough. And this is where the second question is useful — to identify if there are inherent flaws that the company is failing to recognize and fix.
And based on their answer to these questions, you can ask further follow-up questions like, “What did you do in the last quarter to make sure you retain employees better?” or “How can you reduce it further in the next 1–2 quarters?”
Remember interviews are always a conversation and you have the right to ask these questions as much as they have.
But people always lie in interviews
No one would want to accept that their attrition rate is very high or that employees leave because of bad management. You can’t expect 100% true answers to these questions.
I have seen one manager lie outright saying “Haha! We are very lucky to not have any attrition at all.” When there are idiots who answer like that, you better run in the opposite direction.
It also helps to ask this question to all your interviewers. If they are consistent with their answers, that shows that they are truthful to an extent.
Also, if there are people in the higher ranks who can’t even give you a number when you ask their attrition rate, it shows how transparent the startup really is and how committed they are to measuring things so they can improve.
It is not always Black and White
Just because a company losses 2 employees every month, it doesn’t become a bad choice. Nor does a company which has many employees celebrating 5 or 6 year anniversaries, make it a great choice.
So should you skip a company which has double-digit attrition rates? Depends. Your decision to join or skip a company should be based on multiple factors and this is also one such factor.
But based on anecdotal samples, I have realized that there is a high degree of correlation between a company which can retain its employees to how successful it can become.
Originally published at Srinivasan Rangarajan.