You do not have a retention problem. You have a hiring problem.
When someone leaves your startup after six months, it is tempting to blame retention. Maybe the culture was not right. Maybe the role was not what they expected. Maybe a bigger company made them a better offer.
But in most cases, the problem started long before their last day. It started during the hiring process, when expectations were set, when the role was defined, and when the decision was made. Retention starts with hiring, and startups that get this wrong pay for it repeatedly.
Bad hires are expensive in ways that do not show up on a spreadsheet
The direct cost of replacing an employee is typically 50 to 200% of their annual salary, depending on the role. But at a startup, the indirect costs are often worse.
A bad hire in a key role can set a team back months. They can introduce dysfunction into a team that was previously healthy. They can make other good people question whether they want to stay. And the time you spend managing a struggling employee is time you are not spending on anything else.
All of this traces back to the hiring decision. Get the right person, and you have a contributor who sticks around and grows with the company. Get the wrong person, and you have a costly distraction that consumes leadership attention for months.
Where the mismatch starts
The role was never clearly defined. At startups, roles are fluid. That is fine. But "fluid" is different from "undefined." When someone joins without a clear picture of what success looks like in their first 90 days, they will either figure it out on their own (if you are lucky) or flounder and disengage (more common).
The culture pitch did not match reality. It is tempting to oversell during recruiting. "We are collaborative and autonomous" sounds great until the new hire discovers that "autonomous" means "nobody will tell you what to do because nobody knows." Candidates who join based on a false picture of the culture leave as soon as they see the real one.
The interview did not assess the right things. Many startup interviews over-index on technical skills and under-index on working style, communication, and adaptability. Someone can be excellent at their craft and still be a terrible fit for your stage and pace. If the interview does not surface these dynamics, you will discover them three months in.
Compensation was misaligned from the start. If you stretch to make a candidate an offer that is at the top of your range, they will have little room for growth. When their first review comes around and the raise is modest, they start looking. Alternatively, if you underpay someone, they will feel undervalued as soon as they talk to peers at other companies.
Hiring for retention: what it looks like
The companies with the best retention rates are not the ones with the best perks. They are the ones whose hiring process is designed to find people who will genuinely thrive in their specific environment. Here is what they do differently:
They are honest about what the job is actually like. They describe the messy parts, the ambiguity, the things that are not figured out yet. This scares off people who want structure and stability, which is exactly the point. The people who stay are the ones who opted in with full information.
They screen for stage fit. Working at a 20-person startup is fundamentally different from working at a 200-person company or a 2,000-person company. A VP of Engineering who excelled at a large corporation may struggle in an environment where they need to write code, manage people, and fix the CI pipeline in the same week. Stage fit matters as much as skill fit.
They involve the team. When future teammates participate in the interview process, two things happen. The team feels ownership over the hire, and the candidate gets a realistic preview of the people they will work with. Both of these reduce early-stage mismatches.
They set clear expectations before the offer. The best time to align on expectations is during the interview, not after the start date. What does the first month look like? What does success look like at six months? What are the hard parts? If a candidate is going to balk at any of this, better to know now.
The 90-day danger zone
The first 90 days are when most early departures are decided, even if the actual resignation comes later. New hires are forming their impressions of the company, the team, and the role. If those impressions do not match what they were told during the interview, trust erodes fast.
The most effective thing you can do for retention is make sure the first 90 days deliver on what the hiring process promised. That means having a plan, providing support, and checking in regularly to catch problems before they become resignations.
Retention metrics are hiring metrics in disguise
If you are tracking employee turnover, start correlating it with your hiring data. Which sourcing channels produce hires who stay the longest? Which interviewers are best at predicting success? Which roles have the highest early attrition, and what about the job description or interview process might be causing that?
Most startups treat hiring and retention as separate functions. The companies that retain their best people treat them as one continuous process. How you find, evaluate, and onboard someone determines whether they stay.
The takeaway
If your startup has a revolving door, do not start by overhauling your benefits or planning team offsites. Start by looking at how you hire. The conversations you have during recruiting, the expectations you set, and the decisions you make about who to bring on, those are the moments that determine whether someone is still on your team a year from now.