The Covid Churn You’re Not Thinking About
Early on in Covid many businesses, of course, worried about the ways that Covid would affect their business. Many made various contingency plans and quite a few adjusted spending (marketing, sales, hiring, etc) in anticipation of Covid’s impact. While in hindsight I think many (in the tech world, I’d probably say most) companies ended up faring better than they expected, some did not and I think even those that ended up being fine were happy that they took the matter seriously and had contingency plans, even if not all of those plans needed to be implemented.
As we begin to come out of Covid there’s another kind of business impact that I think is important to anticipate and plan for. And it’s not something that many people are yet talking about – post-Covid employee churn. Companies talk about customer churn all the time (it’s the Achilles heel of SaaS businesses, for example, but employee churn is also something to pay close attention to and to plan for.
The Covid era has prompted many people to reassess their priorities and, once we’re able to move around a little bit more, I think we’re going to see a number of employees deciding that Covid has caused them to reassess their priorities. I think some number will leave to pursue other ideas and passions. We have a few companies in the Foundry portfolio that are starting to see the beginnings of this, which is why I thought I’d write about it. I don’t think the right response is to convince employees to stay (at least not in every case), but rather am suggesting that companies consider other ways to mitigate the likelihood that voluntary employee churn increases in the coming 12 months, such as by ramping up their recruitment efforts, considering their “work from anywhere” policies (more on that in an upcoming post), and offering some long-standing employees the chance to take an extended break (phased and planned, not reactive and chaotic), etc.
Not every business will see the effects of this, but as in the early days of Covid, it’s worth planning for.