Creating a Company Culture Where Employees Never Leave

Having a high turnover rate as a result of employees quitting isn't exactly a great scenario for a business. Here is how to ensure your talent stays with your company.

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By Peter Daisyme

Opinions expressed by Entrepreneur contributors are their own.

This article is included in Entrepreneur Voices on Company Culture, a new book containing insights from more than 20 contributors, entrepreneurs, and thought leaders.

According to a recent report released by the Labor Department, there were 5 million job openings on the last business day of January. This was the highest levels of job openings in the U.S. since 2001. It also found 4.8 million American workers left their jobs in January. This was a result of either voluntarily leaving or being laid off or terminated. Both of these stats indicate that the economy is doing pretty well, as long as the departures aren't mainly from layoffs.

While this report may sound promising for businesses, having a high turnover rate as a result of employees quitting isn't exactly a great scenario for a business. As The Wall Street Journal notes:

"High employee turnover hurts a company's bottom line. Experts estimate it costs upwards of twice an employee's salary to find and train a replacement. And churn can damage morale among remaining employees."

So, how can you ensure that your employees won't leave you for someone else? I've found that it's all about company culture. With that in mind, here are some of the best ways to create a culture where employees will stick around for the long haul.

Build a culture around your industry

Before you actually hire your first employee, you must have a clear understanding of what you and your business stands for. Once you identify that, you can construct a culture that will be conducive for your industry.

Take for example the open-source software company Red Hat. CEO Jim Whitehurst informed Business Insider that, "We built our culture to match open source's [culture]." Whitehurst goes on to explain that; "The chaotic nature, the fact that people can call me up whenever and often call me an idiot to my face. We yell and we debate and we have these things out. Our culture matches the culture around open source, so the people who want to be involved in open source feel at home."

Hire the right employees from the start

After you've created and identified your company culture, you can begin to find team members who match that environment. In fact, this may be one of the most important factors in reducing employee turnover.

A good example is Southwest Airlines as an organization who is doing this effectively by hiring employees based on attitude and not just skills. Southwest does this through recruitment ads by attracting people who are looking for and will fit well into the environment and dissuading those who would not be interested in applying.

With my own hosting company I've hired the wrong person several times. They need to fit with every part of your company. Experience is good but culture and meshing well is top priority with our company. This has led to a lot less people leaving.

Recognize the past and future achievements of employees

So, you've defined your company's culture and found employees who fit into that environment. What's next?

After defining the purpose of your company, you need to make sure you get buy-in from everyone. Once employees buy into the values, goals, objectives and overall purpose of the company, you have to prove their efforts have had a measurable impact on the success of the business. Set goals. When goals are met, reward efforts.

While recognizing past accomplishments is vital, you also want have a clear vision for future growth and implement ways for the entire staff to reach those goals together.


As Douglas Magazine states on TechVibes, "Employees want and need to know what is happening in your company. Tell the truth." By keeping on an open line of communication with employees, you're helping to establish and maintain trust and respect, which you could do by publishing a weekly or monthly newsletter.

This not only includes answering any question or addressing any concerns, it also means listening to what employees are saying. If there are rumors, address them openly. If there are any suggestions, take them into account. Not only will this keep employees happy, it could also reinforce the culture of your company.

It's more than a salary and benefits

Salary and benefits play a pay a big part in our company in making sure employees feel compensated. This is why it's important provide them with the proper compensation and benefits, and keep in mind that employees want to know there's room for advancement. Equity or stock is something that will help when you can't give high salaries.

Furthermore, employees will be more likely to stay with a company in a positive work environment where they feel appreciated and cared for. This could mean offering a flexible schedule to help balance their personal and professional lives or creating opportunities for the entire team to have fun, such as having team activities.

Keeping the best employees is hard, but it's totally possible. Find what makes your startup culture work and what your employees need. This will lead to having a much healthier startup atmosphere while keeping employees working at your company!

Peter Daisyme

Entrepreneur Leadership Network Contributor

Co-founder of Hostt

Peter Daisyme is the co-founder of Hostt, specializing in helping businesses host their website for free for life. Previously, he was co-founder of Pixloo, a company that helped people sell their homes online, which was acquired in 2012.

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