Quick Studies

How Location Labs Retains 95% of Their Employees

If you’re clear on what your company has to offer, and find talent that aligns with your goals, you’ll get happy employees who want to stick around.

If a company has a hard time retaining people, they either don’t know who they are or they aren’t communicating it well. The good news: both of these problems can be fixed.

– Joel Grossman, COO Location Labs, as reported in First Round Review

The only thing harder than attracting great employees is convincing them to stick around. Location Labs credits its 95% retention rate to two key factors: they’ve sought out ways to gauge how happy (or not) employees are, and how to reinforce behavior that contributes to their employees’ happiness.

Establish Retention Metrics

The first step towards improving retention rates is identifying measures of employee satisfaction—if you only measure how many people quit, it’s too late to make adjustments. Location Labs found several leading indicators of how people felt about their workplace:

  • High referral rates. At Location Labs, 40% of their current employees were referred. It’s a good signal that employees enjoy their work enough to want to spread the love.
  • Productive conflict resolution. Teams should communicate disagreements openly without fear of retaliation. A “Disagree and Commit” framework hears and respects everyone’s voice, but also expects everyone to rally when a decision is made.
  • A sum of their parts. Ask, “are employees stronger as a team than as individuals?” This is tougher to measure but might look like an employee staying late, or reaching across teams just to lend a helping hand.
  • Productivity levels. Engaged employees are productive employees. They feel energized and motivated to do their best work and are empowered to do so by their team.

The Keys to a High Retention Rate

Once you’ve established a high-retention culture, carefully maintain it by bringing in the right people and focusing on the team.

  • Know who you are, and communicate it clearly. You should know your values, mission, and vision, but you should also be realistic about how you work and who would best fit that environment. Figuring out these personas before you hire will help both you and candidates weed out the wrong fit, and set up proper expectations.
  • Hire for potential and not for position fit. The best candidate will embody your company’s values and possess a team-first mindset.  They show the most promise, based less on previous prestige and more on previous rates of growth. You want them not just to be able to fill the current open role, but have the ability to level up.
  • Reward employees for helping others, instead of helping themselves. Assuming you’ve hired employees who care less about prestige and more about collaborating, reinforce this culture by publicly recognizing and rewarding these efforts. Employees want a sense of community and will stick around longer if they know they’re supported.
  • Allow communication to flow from bottom to top. As vital as it is for leadership to clearly set goals, expectations, and mandates, employees also need to be heard, and should be able to call out a leader who isn’t measuring up. This feedback should be given with the intention to educate and empower that person to do better.
  • Learn from attrition. Use every exit interview as an opportunity to find new ways to improve. Often times, issues brought up during an exit interview were missed or dismissed long before the employee decided to leave. Learn which signals you missed, and improve how you collect feedback from current employees.


Published April 19, 2016

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