Creative Employees Leaving? Maybe You Can (and Should) Keep Them

Last Updated May 10, 2011 3:07 PM EDT

Facebook has been the hot place for engineers and software developers to work. Last fall, Google (GOOG) made itself look desperate by giving 10% raises to all employees and offering enormous bonuses to keep people from jumping to Facebook. Yet now, according to Nicholas Carlson at Business Insider, it's Facebook that's now facing a large exodus of engineers and managers.

Carlson says that it's all people who have been there for four years or longer and whose unrestricted options have vested, letting them become millionaires on private stock exchanges. However, other dynamics are also at work. So, is losing great talent just a part of the game? Maybe not.

They're in the money
It's not that there's a sudden flood of people out the door at Facebook, according to Michael Morell, managing partner at San Francisco-based recruitment firm Riviera Partners:
I haven't seen a big exodus from Facebook. Obviously, there are always the select few. But we're seeing that from a lot of the companies that are providing early access to liquidity. Most of these folks are either doing their own thing or getting involved in investing in new companies.
"Some of these kids are 25 years old," says Marilyn Weinstein, CEO of Silicon Valley IT consulting and recruitment firm Vivo. "There's no reason for them to stick. I don't think you can say to a 26-year-old kid who's now a millionaire that I can give you $10,000 more in salary [and expect the person to stay]."

There are signs are that Facebook's stock value may have already peaked, given the outrageous valuations now being bandied about. Waiting for the IPO might be too late for those already vested to catch a top share price.

And yet it's not just about the money
Of course, money is only one reason talented people leave. After all, being able to afford to walk away is the same as being able to remain -- especially if a hot pre-IPO company makes it possible for them to cash in their stock.

These early-stage employees tend to be risk-takers "willing to work for a smaller or unknown company for higher benefits," according to Sunil Phatak, director of US recruitment at Silicon Valley-based IT staffing and consulting firm Akraya.

Growing companies want this type of employee, because they don't have the resources a large corporation has for the pay and benefits that appeal to people who want a long-lasting job. "[The risk they took] has paid off magnificently, but that doesn't change their inherent nature of exploring and taking calculated risks."

Ch-ch-ch-changes
What makes the same risk-taking difficult is cultural change. Companies, of necessity, become different as they grow. Entrepreneurial people who helped make the company a success in the first place can find the shifts stifling. Developer Douwe Osinga worked for Google for seven years in Europe and recently blogged about leaving the company. He gave two reasons. One is the move he saw from opportunistic product engineering to a strategically-driven view:
No doubt this approach suits a bigger company better. But the engineer in me wants to go back to that whiteboard; hire smart people that exploit new opportunities that become available as technology develops to build new products and services, which in turn leads to user happiness. Having a plan easily gets in the way of doing the right thing there.
The other is a secretive culture that has become insular:
There are very few internal secrets and that works because the rule is that you don't talk about anything to outsiders. Living as an engineer in this peculiar world with its own technology stack and ideas about technology is very exciting especially in the beginning.... But being inside is a bit like being in a walled garden. You can't discuss interesting developments inside with people on the outside of course, but it is even hard to partake in discussions outside. And so after a few years what you learn and what you talk about seems less relevant for the real world.
The ability to come up with an idea, move quickly, create something, and take a chance that the world will reward you disappears. New restrictions can make the company look as though it no longer trusts the employee's taste or instincts. People who like to take risks also want the respect of being seen as able to pull them off.

Hanging on to talent
As Weinstein said, "The new product line will require some fresh blood to come in." Still, new blood can also stagnate, and those who have been creative in the past may still be be so. Companies could typically benefit from keeping at least some portion of the people that leave. Here are some steps that might help reduce the churn of the creative entrepreneurs and create new opportunities for employers:
  • Most companies drive strategy from the top down, but is that really necessary? Those closest to daily operations often have insights into markets that elude top managers who aren't close enough to daily business to see them. A company could involve those it values in meetings on strategic direction. That doesn't mean engineers will set direction. But it's always better to let someone participate in the process than to simply dictate to them.
  • Instead of treating employees as drones fulfilling company demands, give them projects to run. They may be small in scope, and will likely fit within a larger context. But few things make people feel as free as some control over what they're doing. If you've got the right people, then take a chance and let them have both responsibility and authority to carry something out.
  • Consider creating a group of entrepreneurs charged with finding new and great ideas, and then let them create proofs of concept, giving them freedom while constraining the resources available -- in other words, allowing necessity to be the mother of invention. Most importantly, let them interact with people outside the company, trusting them not to pass on what is most sensitive. The infusion of new ideas and concepts can only help.
Not all entrepreneurs will stay, and not all should. But experimenting with structure and organization is healthy, and might help capture that new new thing before someone takes it out the door.

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.