The Psychology of Employee Retention

This is a great point, and I wish some of the executives as my previous employers understood this. For awhile, things seem great. The company has a core product that is showing great growth. That in turn leads to even more ambitious goals. The value from the above allows the company to offer generous perks. Life is good.

Then what happens? The core product begins to plateau. Executives begin to abandon long-term, ambitious projects, in order to squeeze more juice from the lemon to hit quarterly goals. Finally, perks are cut because it's just way too lavish to have free soda when you're only growing profit 33% year over year instead of 100%. As the OP indicated, the employees are no longer left with any stories. You may still enjoy your day to day work, you may still be well compensated in terms of salary. But without that intrinsic motivation, it's only a matter of time before your enthusiasm flags and you're looking for another job that can offer you what you had before.

For company leaders, products plateau and nobody is successful all the time. But goals and perks are under their complete control, and especially for the latter, it usually requires only as nominal amount of money. It can mean all the difference in retaining your talent during bumpy times, or having everyone abandon ship because they feel abandoned already.

Github recently shared some of its secrets on this topic[1]:

"We've gained 100+ employees in two years and we've never had anyone quit. That won't last forever, but I think it's a good indication of the type of company we've built. There are certain things you can do to retain employees, and by worrying about employee happiness you'll ultimately create a much better product."

[1] http://zachholman.com/talk/how-to-build-a-github

Same here. There's no amount of ping pong or free soda that will make me put up with a bad team, bad management or lack of purpose I can care about.

I also hope that a good PC with good monitors and a decent desk and chair should not be considered part of the perks.

The most important part for me, as an employee, is what I do at work. More than how my company changes the world, I'm interested in what I'm asked to change in the company. And, rather than than a project like: "Here are the specs, when will it be done?", I prefer a lot: "Here is an idea, do you think it can be done?".

In my opinion it's a mistake to come up with perks just so you can tell the right story. In his most recent book Clay Christensen describes what makes you love your job better than anything else I've read. He distinguishes between motivators and hygiene factors (mainly citing Frederick Herzberg's research): "Motivation factors include challenging work, recognition, responsibility, and personal growth. Motivation is much less about external prodding or stimulation, and much more about what’s inside of you and inside of your work." On the other hand he lists hygiene factors: "status, compensation, job security, work conditions, company policies, and supervisory practices." (from http://www.fastcompany.com/1836982/clayton-christensen-how-f... and his book). You can pile up perks as much as you want; they just serve as hygiene factors. As long as your motivators are not met, a high retention quote is wishful thinking. HR departments at bigger startups (and bigger perks) know that all too well.

At the end of the day you don't work for the big colorful slide at your office, or Whiskey Fridays, or your favorite 80's arcade video game. Cynically speaking, these are just there to make your long work days a bit sweeter.

So what's left for startups to retain their top employees? It's figuring out what truly motivates them. This takes a lot of hard work, empathy, and will. It's a long term investment. As such it might not pay off in the short term, but it might well give you in return the high retention rate you're looking for.