Effects of Low Staff Turnover in a Business

Staff or employee turnover refers to the number of employees who leave a certain company and are substituted for new ones.
Back when I worked in Groupon Dubai, we would lose at least one employee a week. It was scary knowing that you could be let go or even worse, forced to quit so easily! Management must have thought it instilled an environment of hard work in the workforce, but was this high staff turnover rather beneficial or destructive to the overall team morale? Continue reading to see some of the effects of high and low staff turnover.

Fear Versus Security

Having a high employee turnover in a business instills fear in the employees who work there and reduces their overall morale. They know that it’s easy for the organisation to replace them if need be.
On the other hand, low staff turnover means that the company values its employees and appreciates their work, which in turn makes workers more secure about their jobs and more productive.

High Cost Of High Turnover

High staff turnover means higher costs for a business. As my boss once explained to me, a company spends a lot of money hiring and training new staff. Companies with low staff turnover spend more time interviewing potential employees to make sure they’re exactly right for the positions they are interviewing for before making a final decision.

Achieving A Low Turnover

So how does a company achieve and maintain a low staff turnover? Studies show that decent salaries and better communication between managers and its employees greatly reduces employee turnover by enabling employees to work for longer periods of time at an organization. Finally, being able to progress and get promoted in a company also reduces employee turnover.

To put it in a nutshell, it makes sense for companies to have a low staff turnover for several reasons, including lower costs, better employee morale, and higher productivity.



The challenges of women entrepreneurs

Out of the main support structure that I have had access to was an incubator in the United Arab Emirates that I was a part of throughout my experience with my previous startup. This incubator provided me with a lot of advice, assistance and hand-holding when it came to legal matters. It also sometimes gave me a little bit of access to some VCs or angel investors. Specifically, I benefitted from a coworking space, a mentors’ network, some legal advice, an entrepreneurs ecosystem, event hosting, bank/financial advice, IP advice, and access to funding. Unfortunately, out of most support services I used, none targeted women specifically. In fact, I’d say that the communication of services to startups in the Middle Eastern entrepreneurship ecosystem and its capacity to target and reach out particularly to women is very weak. Furthermore, the time schedule of most proposed services to entrepreneurs in terms of work life balance was very inadequate with regards to women.

In my path to business creation I stumbled upon a lot of challenges as a women entrepreneur. The biggest challenges were getting encouragement and support from my environment (family, friends and society in general), having to deal with gender biased treatment, attracting and retaining talents since most of my work was online and I had to do all of my interviews and recruitment remotely, and finally identifying and securing access to credit and funding. I believe the gender biased treatment was due to several facts but mainly a lack of trust in women’s capability to take charge and run a company, a lack of faith in women’s capability and proficiency in the digital sector in particular and finally a stereotyping portraying women as more tender, sensitive and having less conflictual personalities.The following is a solid example of a gender biased action towards me as an entrepreneur that never fails to strike me. It has happened several times that I have gotten the following comment: “Why do you stress yourself so much. Just relax”? From my experience, it is normal for a new entrepreneur to stress about his/her startup and life in general in that specific phase of his/hers. Things are generally fragile when a person decides to quit his/her day-job and launch a startup. But when this is communicated to ME, mostly by other men and sometimes even working women, it is meant in the following way: “You, as a women, should not be stressing about work as a man otherwise would. You will one day be the caretaker of your household and thus should conserve your energy for more female-related activities”. Taking measures such as gender-targeted communication, women-to-women advice, free mentorships and partnerships with women’s networks could be very helpful in making support services to web entrepreneurs more suitable to meet women’s needs.I think some facilities need to be put in place allowing women entrepreneurs to better balance their work-life such as providing daycare facilities for women entrepreneurs. Moreover, more women should come up and speak about their experiences in the work life specifically in the entrepreneurship ecosystem as well, thus giving other aspiring women entrepreneurs hope and advice. Finally, more women should speak freely about the challenges that they have faced in starting up their own businesses and technology companies.

Image Credits: Barriers for women entrepreneurs

How to calculate the expected value of a startup vrs. a small business

When you think about the 1% that is the success rate of most startups (at least in the United States but generally worldwide), you wonder how people calculate the expected return and assess their profitibality with regards to such an endaveour. Melanie says it best in her enlightening blog post incentivizing people to build lifestyle businesses instead of startups in which she basically calculates the expected return (after taking into consideration success rates and other relevant statistics) of hyper growth startups that end up exiting at $100M+ valuations and lifestyle businesses that make around $1M in revenues a year. The expected return, after taking into consideration the 1% success rate of the former, spliting equity between co-founders, and the success rate of actually making it into a $100M+ exit ends up being around 3 Grand. Not what you expected right? That’s because you’d have to multiply $100,000,000 by 1% then again by 50% then again by 2% then finally by 33% (which is the highest amount that the founder will probably own after dilution at the said exit) and you get exatly $3,300. Remember, this is NOT the value that a founder would get if successful, but rather it is the expected return based on the realistic probabilities outlined above.

According to statistics, the success rate of small businesses in the US is 44%, a surprising leap from the mere 1% for startups. Doing similiar calculations to the aforementioned gives us an expected return of around $356,400 with an expected exit of $3.6M. Ok that’s not as cool as the former exit of $100M+ but look at the odds.

What I suggest most aspiring entrepreneurs should do is plug one more thing into the equation in order to make both of the above expected values more precise, and that’s your credentials, in addition to the how, when and where. For instance, whether you have relevant experience, whether you have succeeded at a similiar endaveour before and whether you have relevant mentors all factor in to highly increase (or maintain constant) your chances at startup success. As for the other way around, I don’t really believe that not having the aforementioned criterea will decrease your chances with regards to the calculations we just made, because the percentages that we took into consideration don’t actually factor in relevant outstanding credentials.

Original image credits: Idyllic Software

The rise of the Lebanese entrepreneurs 

Lebanon – not the first amongst its neighbouring Arab countries – has been attempting to set up its own Silicon Valley. In fact, the Lebanese government is making available millions of dollars worth of money towards lebanese startups, mostly in the tech industry. Who would have thought? Serious money is spurting in all directions, innovation is everywhere and startups are popping up like mushrooms. Intermediaries in the form of funds such as Berytech (approximately $30M) and MEVP (approximately $50M), but also venture capitalists and Banks (as new Angel Investors for tech startups ) have been put in place to make these investments possible.

At the Banque Du Liban Accelerate 2014 conference on November the 21st and November the 22nd of 2014 in Lebanon (Lebanon’s first international startup conference), over 50 startup industry experts from different geographical regions were gathered to marshal plans for success for thousands of global entrepreneurs, investors and professionals.

Some of these industry experts included reknowned speakers such as Mike Butcher (Editor at Large of TechCrunch), Jambu Palaniappan (General Manager of Middle East & Africa at Uber) but also Lebanese speakers such as Jean Nehme (Plastic Surgeon, CEO and co-founder of Touch Surgery). The latter, Jean Nehme – young Lebanese-British Plastic Surgeon turned entrepreneur – founded Touch Surgery which is a surgical simulation application that doctors as well as patients can use to practice surgical procedures; a game-changing technology. The startup has been operating in partnership with global top-ranking institutions like Stanford University, Duke University and Imperial College.

This fundamentally proves that, despite turmoils, the Lebanese are a mixed bag of people who are both receptive and responsive to innovation and versatile ideas.

Image: Banque Du Liban (Lebanon’s central Bank)

Mine, yours, ours: The loom of a new sharing economy

From leasing residences, to sharing rides, to clubbing together to finance creative projects, sharing has become increasingly popular in today’s economies worldwide and has recently been used to spur innovative business models and generate considerable amounts of revenue. A research done by Roland Berger strategy consultants suggests that this specific sharing economy is going to further preside throughout the upcoming years.

The Uber company – which offers ride-sharing services – originating from California and now operating in more than 30 cities worldwide, was valued at $18 billion. Airbnb, the service that allows people to lease residences, has more than 800,000 entries in more than 192 countries and is valued at approximately $10 billion. Finally, Kickstarter, a large and global crowdfunding platform for creative projects (such as movies, games, music albums and other projects) has an estimated valuation of $1 billion.

This ‘swapping’ economy is largely owing to the technological innovations that have been happening in the past decade relating to communication, specifically in how they have faciliateted and completely changed human and other communications. In fact, all facets of our lives now seem to be dominated by online communication. The world is progressively being transformed into one global network. Humans, devices and programs are continually interlinked and exchange information in realtime as if the world was one compressed little community.

Prospects in this new sharing economy have already become visible, as per some of the aforementioned examples, with the majority of them relating to mobility. Moreover, young new entrepreneurs have been generating original and innovative ideas relating to this sharing economy incessantly. Some more examples of companies taking advantage of this economy are the following: swap.com, zopa, Bcycle, CouchSurfing, BookMunch, ZiLok.com, carpooling.com and zipcar.