The ESG Initiative at the Wharton School


When Startups Lose a Very Early Employee, They May Never Recover

Outlet: Wall Street Journal

Everybody knows that founders have a huge impact on how a startup performs. But what about the first bunch of employees they hire? That was the question a group of four researchers sought to answer in a recent study.

“We wanted to see how much the talent of those early employees, who were formally hired and salaried within the first year of a company’s life, mattered,” says co-author J. Daniel Kim, an assistant professor of management at the Wharton School at the University of Pennsylvania. The researchers found that the initial people hired in a startup’s first year have a strong and long-lasting effect on the company’s performance, while the same is not true for employees hired just a year later.