[HN Gopher] Company with a 10% lifetime employee turnover shows ...
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Company with a 10% lifetime employee turnover shows their real
secret is trust
Author : macbookaries
Score : 66 points
Date : 2023-10-31 17:52 UTC (5 hours ago)
(HTM) web link (fortune.com)
(TXT) w3m dump (fortune.com)
| bumby wrote:
| What's the data on pluralistic societies and trust? Does having a
| mish-mash of different ethnicities, value systems, and political
| outlooks tend to make for a low-trust society?
| femiagbabiaka wrote:
| What is the origin of the high/low trust society theory? It seems
| to be quoted as fact when talking about places with low crime
| like Finland and Japan, but I'm not sure what its empirical basis
| is. Even the Wikipedia entry is low on quality citations.
| valianteffort wrote:
| Some balance of homegeneity and wealth seem to produce high
| trust societies. You can see many wealthy nations with low
| trust (US) and likewise very homogenous nations with similar
| issues (SEA, India, African). You could argue that
| tribal/ethnic/caste differences cause the issues but
| regardless, homogeneity appears to be a contributing factor.
|
| At the same time you could chalk it up to cultural differences.
| Japan is unique, and Finland is sparsely populated. Smaller
| communities tend to be higher trust, even in the US.
| hiAndrewQuinn wrote:
| Interestingly, Japan and Finland are also legendarily
| friendly with one another. Many small towns in Finland are
| sister cities with small towns in Japan, and it forms a kind
| of clandestine EU-Asia corridor for skilled workers looking
| for a change of pace.
|
| All high trust societies alike, all low trust in their own
| special way, perhaps?
| narcindin wrote:
| India is not homogeneous. Neither are most (all?) countries
| in Southeast Asia or Sub-Saharan Africa.
| valianteffort wrote:
| Homogenous is a pretty loaded term imo. You could have two
| genetically identical groups claiming they belong to
| different ethnicities or tribes and are thus, not
| homogenous. Or in the case of Japan you have two major
| ethnic groups, evenly disperses and so intertwined no one
| thinks about it, making them homogenous.
|
| Homogenous thus in my opinion is more like a mix of
| homogeneity of appearance/culture. Indian people largely
| share the same appearance and culture, so in that regard,
| they are homogenous. Africans likewise. Whether some sub-
| groups have their own distinct appearance, or cultural
| practice, they are largely similar.
| femiagbabiaka wrote:
| Unfortunately this (overfocus on genotype) is the mistake
| the west made when it came to determining homogeneity
| (and creating nationstates out of whole cloth) and it
| (plus other phenomena, not meaning to shift blame) has
| resulted in much of the ethnic cleansing of the 20th
| century.
|
| As an example, the formation of African states, cutting
| across traditional tribal lines which resulted in the
| ethnic cleansing of the Igbo in former
| Yorubaland/Nigeria.
|
| India has so many complex cases of this that covering it
| is an essay of its own.
|
| Even Japan, with its claims of being an ethnostate,
| became one by force of ideology -- force so strong that
| it seems like common sense even though it was not true
| then or now.
| ethanbond wrote:
| You can form your own empirical basis by just traveling to a
| bunch of different places. The differences will pretty much
| smack you in the face (or the wallet).
| Halen7 wrote:
| These articles are so silly. Of course you have low turn over
| rate, you live in a city in the middle of nowhere with little to
| no competition.
| gspencley wrote:
| And like someone else said, the company is only 12 years-old.
| Of course I've seen start-ups with _insanely_ high turnover
| rate. But if you 've not existed long enough to see people stay
| until retirement then you don't really have a significant data
| set. If a company like IBM or GE could claim a 10% lifetime
| turnover rate that would be something to marvel at (only used
| them because of how long they've been around for, I'm sure they
| are far from the most wonderful places to work).
| FirmwareBurner wrote:
| That and the focus of the company being relatively niche with
| little to no competition in the space.
|
| Like sure, there are other fancy furniture companies who could
| probably pay you more, but you'll most likely have to uproot
| yourself and move to a completely different city or even a
| different country.
|
| With all this in mind, low turnover is natural.
| alberth wrote:
| Since the article doesn't directly link to the company they
| reference, its:
|
| https://www.frameryacoustics.com
|
| The company is only 12-years old.
|
| It should be no surprise that, for a company still in business
| after a decade but also not a super old company either - that
| they have hired way more than let go.
|
| (Seems a bit of confirmation bias combined with survivor bias
| going on)
| stavros wrote:
| It's not just "let go", it's also "left". That's the surprising
| bit.
| zamadatix wrote:
| Is it that surprising considering the company went from 0 to
| 400 people in 12 years? Most of these people will have been
| onboarded towards the tail end of this and won't have been
| there that long. The few that were there in the early days
| are likely in cushy jobs riding a rocket ship that has yet to
| have a period of pointing back to earth. Neither is
| particularly surprising.
| earnesti wrote:
| It is pretty much a marketing piece, overall. I'm from Finland
| and there are tons of layoffs all the time. No one wants to do
| layoffs, sometimes companies just have to do them to survive.
| jandrese wrote:
| > The company is only 12-years old.
|
| That explains a lot. Not only is it not much time for turnover,
| but it almost certainly means the original management is still
| running the show. Trusting in a person is easy, but keeping
| that company trust for year after year is very hard, especially
| if the company grows. It only takes one asshole manager to
| break that trust and once broken it takes many many years to
| rebuild, if ever.
|
| This happened a lot in the US where companies would cultivate
| loyalty in their employees throughout the 50s and 60s and even
| into the 70s. Then the old guard retired and new management
| came in and started abusing the trust in the name of a higher
| bottom line--doing mass layoffs, cutting pensions, slashing
| benefits, outsourcing, engaging in huge stock buybacks with the
| funds instead of investing in R&D, typical 80s and beyond
| behavior. Then they went all Pikachu face when employee loyalty
| dried up and their competitiveness faltered and the companies
| found themselves unable to compete without government
| assistance.
| a-priori wrote:
| Just because it's 'not much time for turnover' doesn't mean
| there's plenty of younger companies with much higher lifetime
| turnover.
|
| In the tech industry, the average annual turnover rate is
| 13.5%. If I'm doing my math right, that amounts to a lifetime
| turnover of 77% for an average 10 year tech company assuming
| flat employee count over the time period, or 51% for the same
| company with linear growth from zero over the time period.
| Both are well above the 10% this company is claiming.
|
| (The 77% came from 1 - ((1-0.135)*10), and the 51% came from
| 1.0 - ((1-0.135)*10) _0.1 - ((1-0.135)*9)_ 0.1 -
| ((1-0.135)*8)*0.1 ... to sample even cohorts of 10, 9, 8,
| etc. years making up equal portions of the population.)
| danielovichdk wrote:
| I did like the Open Door Policy. That is a good idea for enabling
| transparency I believe.
| bumby wrote:
| I used to think so too, until I heard Cy Wakeman's perspective.
| Too often an open door policy turns into a venting session or,
| in her words, "a portal for drama." I got to witness this
| first-hand when I had an office across the hall from my former
| boss.
|
| https://hrdailyadvisor.blr.com/2017/09/25/hr-department-reth...
| matt3D wrote:
| I think that the open door policy needs all of the other
| layers of trust.
|
| What Cy Wakeman experienced was an open door policy
| independent of any other culture change.
| isk517 wrote:
| Yes, people don't just vent because the boss's door is
| open, they vent because some pressure has been built up.
| Closing the door doesn't make the drama go away, it just
| buries it underground were it will continue to make certain
| groups of employees who are unable to ignore it
| continuously more uncomfortable and less dedicated to their
| jobs.
| SpicyLemonZest wrote:
| This feels like a clickbait framing. She says at the end that
| she didn't shut the door, just tried to drive the
| conversation in a helpful direction rather than letting
| people engage in unlimited unstructured venting. I'd still
| call that an open door policy.
| bumby wrote:
| Yes, I meant that an "open door policy" isn't sufficient.
| It also needs the framing to avoid the drama and focus on
| solutions. Relating back to my personal experience, an open
| door policy without those elements just wastes everyone's
| time. I didn't mean to imply that open door policy is bad
| per se, but just often badly implemented/understood. The
| title of the article is about "rethinking" open door
| policy, not getting rid of it. Adding nuance to a point
| shouldn't be conflated with being against it.
| NKosmatos wrote:
| I agree, but the irony is that this company (Framery) is
| producing soundproof pods and booths for people to work in.
| Check their products page :-)
| danielovichdk wrote:
| Absolute gold :)
| JaDogg wrote:
| I assume majority of the hacker news readers, no matter how good
| their job is want to quit and do their own thing.. do you think
| my assumption is correct? is that the norm? or am I just abnormal
| ?(wanting to do my own thing)
| webel0 wrote:
| It depends on how realistic one is being. In a perfect world?
| Maybe. In the actual world? I think a lot of people get to a
| point in their career where they want a solid, steady paycheck
| with minimal drama. There are also a lot of "deep tech" areas
| where it makes more sense to be in a larger firm than to be out
| on your own trying to do a startup or whatever.
| NKosmatos wrote:
| You're not abnormal, many people would love to do their own
| thing in an ideal world. There are various reason (cost of
| living, family, location, responsibilities, capabilities...)
| most of us stay in our current positions and don't move out of
| our comfort zones.
|
| IMHO each one of us needs to ask/answer the reason for wanting
| to do something on its own. Is it for the money? Is it out of
| love for a specific activity? Is it out of need for success? Is
| it because of a need for a different lifestyle?
| jaggederest wrote:
| That's only true until you've quit and done your own thing for
| a while. There are benefits and drawbacks, it's not for
| everyone.
|
| I for one prefer focusing on engineering and team building over
| sales and marketing, which means that to "do my own thing" I
| end up spending half or more of my time doing things I don't
| enjoy, which is just not worth the headache.
|
| If I had a significant cash reserve I would probably have a lot
| of fun building a product in the context where you didn't have
| to grind for every dollar... but that's also just known as a
| hobby I think.
| biomcgary wrote:
| Freedom to pick a job with work that you love can be much
| better than doing your own thing. I am a scientist working at
| a biotech startup. I "hired" a CEO and a few other folks to
| run the business so that I can do the science. I didn't even
| have to front my own money.
| bradlys wrote:
| I think you're very wrong. I think if most of us could even
| find a good job then we would stick with it. The problem is
| that a good job is extremely hard to find and a good job is a
| moving target. What is a good job five years ago for us might
| not be a good job anymore. Compensation, what you're working
| on, technologies used, the coworkers you have, the progression
| you want from your career, etc.
|
| I think the reason some people on HN want to do their own thing
| is because the jobs we have suck so much and they feel that by
| doing their own thing they will take back control and be able
| to have the life they want.
|
| I think it's somewhat delusional. Founding your own company,
| finding a great revenue stream, and getting adequate
| compensation with it is incredibly challenging and not a common
| route at all. If I want to make $500k+/yr, I am much better off
| joining a big public tech company.
| 6510 wrote:
| Money is the wrong excuse to do your own thing. Ideally you
| have something you really enjoy doing or something that
| fascinates you endlessly then find an angle to do it for a
| living. It doesn't really matter if you succeed. If your
| thing is [say] fitness and you get to fool around in your own
| gym for a few years you've done well. You wanted to DJ and
| started your own club. You enjoy bowling and got to own your
| own bowling alley - for a while. Go do those things you
| wanted to do when you had all that money?
| bradlys wrote:
| It's not a realistic approach to life. Homes cost money.
| Children cost money. Wives cost money.
|
| You can't just go pursue whatever passion you have unless
| you are willing to say give up having children, a wife,
| and/or a home. Especially true when you live in a place
| like silicon valley like so many readers on HN do. Homes
| are now $2-3m. If you're married - your wife isn't gonna be
| happy with the _massive_ downgrade in lifestyle either. You
| just can 't do these things, unfortunately.
| zamadatix wrote:
| Not at all for me. I want other people to deal with "the rest
| of it" so I can do something cool with computers instead of
| running a business. HN has both types here, which is great for
| someone like me.
|
| At the place I'm at now the founders hired a CEO and associated
| folks to run the business after it got to a certain size so one
| could focus on running sales and the other could focus on doing
| engineering.
| theshrike79 wrote:
| I'd love to do my own thing IF I was independently wealthy. I
| could just do cool shit and see what sticks.
|
| Doing that while also worrying about how I'm going to pay the
| mortgage and get food on the table for next month? No thank
| you.
|
| I'm perfectly happy being a well-paid problem-solver in Someone
| Else's Company. I won't get filthy rich, but I have close to
| zero work-related stress and I live comfortably.
| fragmede wrote:
| > I assume majority of the hacker news readers
|
| Why would this be limited to HN readers? A lot of people would
| rather be independently wealthy. A _lot_ of people play the
| lottery. The more interesting question is after the boring
| things with the lottery winnings - cocaine, strippers, cars,
| houses; what is "your own thing"? Open source contributions?
| Software consulting? HN commenting? Something not having
| anything to do with computers?
| vsareto wrote:
| >The trust that's given to employees will be returned tenfold-or
| even hundredfold. Everyone wins.
|
| I must be a mercenary because that still reads to me as "we can
| do these things instead of paying you more". In fact, there is no
| mention of where their compensation falls, so it would be
| especially rude to do all of these things and then underpay your
| employees.
| hnthrowaway0315 wrote:
| Pay is just part of the story. I'm so frustrated with the
| current company that I'm willing to cut my TC to transfer to
| something I'm happier with.
| ethanbond wrote:
| I mean we _know_ that compensation isn 't the primary factor
| for most people's happiness and satisfaction in their
| professional life. Put mercenary in and get mercenary out if
| you want, but for most people that's not the optimal strategy.
| FirmwareBurner wrote:
| _> I mean we know that compensation isn't the primary factor
| for most people's happiness and satisfaction in their
| professional life._
|
| It isn't, but housing is, and housing costs money, a lot of
| money in the last few years.
| bumby wrote:
| Is there data showing that housing is the primary driver? I
| vaguely remember Sebastian Junger's book _Tribe_ describing
| how people in low socio-economic community housing
| generally were happier than more well-off people in
| individual housing. I think his thesis was modern life,
| with suburban living, tends to disconnect us from
| community. From that perspective, it would seem like
| community is more of a primary driver than housing.
| FirmwareBurner wrote:
| There are also communities of well off people. In Europe.
| Not every well off person lives alone in a huge ranch
| 500km away from the nearest town.
| bumby wrote:
| I wasn't making a dichotomous claim about wealth. I was
| pointing out that housing may not be the primary driving
| of well-being. It's easier to illustrate with an example
| where lower income people report being happier, despite
| having less resources for good housing. Similarly, we
| could point out to poor people who are isolated and
| unhappy but that also misses the point.
|
| Back to the original ask, I would be curious if there's
| data that shows housing as a primary driver of well-
| being, above those other elements.
| FirmwareBurner wrote:
| Well, self reported happiness is all relative. Someone
| who has two goats in a town of no goats will be very
| happy while someone owning a small apartment in a town of
| McMansions will feel very unhappy.
| bumby wrote:
| Ironically, there is evidence that money is still the primary
| driver of job selection (above meaningful work), based on the
| assumption that money will make them more happy.
|
| https://giesbusiness.illinois.edu/news/2023/10/23/paper--
| hig...
| ethanbond wrote:
| Yep, people tend to have different (even contradictory and
| self-defeating) preferences over different time horizons.
| Many such cases.
| AlotOfReading wrote:
| I'm not sure that motivation follows from the preference.
| Money is an extremely good proxy for all sorts of desirable
| job attributes like respect, better working environments,
| and social status.
| bumby wrote:
| I would tend to agree, in part because of hedonic
| adaptation. I suspect the impact on happiness from more
| money is relatively less enduring.
| linguae wrote:
| This has been my strategy. I would rather be paid less
| working for a lower-stress company that treats my colleagues
| and me well than to get paid a higher salary working in a
| stressful, less respectful environment.
|
| With that said, I'm paying for this decision with inflation
| outpacing annual merit increases at work, which means my
| effective pay is getting reduced as the prices of everything
| else rise around me. I still rent an apartment; I got
| repeatedly outbid in 2021 when I attempted to buy a home, and
| then the interest rate hikes of 2022 and 2023 completely
| priced me out of the market. I'm still living fine, but this
| inflationary environment is highly demoralizing.
| vsareto wrote:
| My guess is they aren't seeing how much they're going to need
| for retirement (maybe it's much cheaper in Finland than the
| US), or have not thought about it, or have accepted/decided
| that they will work for more of their lives.
| KeepFlying wrote:
| I'm more curious if people are able to find another equivalent
| job if they leave. 10% turnover is a lot less impressive if
| you're the only game in town.
|
| Can we trust the turnover rate or is something else keeping it
| down?
| gav wrote:
| I've worked with a few companies where a significant portion
| of the staff have been there a long time--the sort of place
| where you join after high school and stay until retirement
| and the "new guy" has been there over a decade.
|
| One CEO told me their secret to employee retention:
|
| 1. Compensate people a little better than you need to
|
| 2. Promote internally
|
| 3. Be one of the few employers in town so that 1 and 2
| compound
| hutzlibu wrote:
| "we can do these things instead of paying you more"
|
| In short, yes and it makes sense. If a company treats you as
| shit, the compensation needs to be higher. If they treat you as
| a human and you know they don't screw you whenevery they have
| the chance - at least I rather work for such a company even
| with lower compensation. But for sure, every employer would
| like to have more money _and_ also better work conditions ...
| paulcole wrote:
| If a company does all those things and the employees are happy
| to keep working there, how can anyone argue that they're under
| compensated?
|
| Pay is part of compensation and compensation includes what
| going to work feels like.
|
| If I'm at a reasonable level of pay I'll absolutely optimize
| for work that feels enjoyable vs. wringing out a few more
| dollars. And my definition of reasonable is quite low
| (intentionally because I live as cheaply as is possible in the
| US with a chronic illness).
| HillRat wrote:
| In general, salaries are "hygiene factors" for retention -- you
| lose people by underpaying, but you don't in most cases improve
| retention by overpaying. There's an interesting wrinkle in
| Finland in that income tax payer data are considered public
| records, so if you wanted to benchmark your salary you could
| simply request applicable data from Verohallintm, so
| theoretically -- a very big "theoretically" it must be said --
| that should work against companies paying below-industry comp.
| hiAndrewQuinn wrote:
| Hm. Why is this "theoretically"? I live in Finland and
| wouldn't mind requesting this data. It couldn't be more than
| a few days' crunching numbers to figure this out.
| HillRat wrote:
| "Theoretically" only in the sense that most people won't do
| it (since the data isn't easily available, and you'd need
| to figure out who you were benchmarking against before
| requesting it), so the practical effect may be negligible.
| BobaFloutist wrote:
| What percentage of the population do you think would
| equally not mind submitting a formal governmental records
| request followed by a few days crunching numbers?
| jandrese wrote:
| Your point of view is sad but understandable. Companies that
| show no loyalty deserve no loyalty, and that's pretty much all
| medium and large businesses today.
| vsareto wrote:
| The biggest looming factor is that many jobs in the US are
| at-will employment, so while people can have good intentions
| and share those with you, the person or company can turn
| around and fire you for almost any reason. There's no penalty
| for going back on their word.
|
| Finland has something different than that though and it
| sounds like it's harder to fire people.
| SpicyLemonZest wrote:
| I'm pretty skeptical of an analysis of a company's turnover rate
| written by that company's head of HR. It's just too easy to leave
| out relevant factors to draw any conclusions from reading this.
| If their real secret were something unsavory like "we have large
| golden handcuffs" or "our employees don't have good options",
| would they share that?
| diob wrote:
| My favorite version of talking about this sort of stuff was
| from a company that acquired the startup I was at.
|
| "We retain 90% of our top 10% of talent".
|
| Riiiiight.
| naikrovek wrote:
| cue the scam artists flocking over there to "con those rubes."
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