Microsoft's big mistake

Last week, Microsoft offered roughly 60,000 employees — about a quarter of its workforce — a voluntary exit: severance, career support, and a time-limited window to decide. Two days later, CFO Amy Hood told staff she expects "very few people" to take it, because of the growth opportunities inside the company.

Maybe. But that's a bet on who those few people will be.

Here's one thing I know to be true this week: an open door doesn't choose at random. It chooses the people with somewhere else to go.

Think about who reads that email and actually clicks through. The person coasting stays put. The severance is nice, but the paycheck is nicer. The one who clicks is the engineer with three recruiter messages in her inbox. The manager sketching a startup on weekends. The high performer who stopped feeling like her work mattered six months ago and has been waiting for a clean way out.

Economists call this adverse selection and, as someone who spent twenty years recruiting people away, I can tell you bluntly what that means: the market finds your stars before you do.

Microsoft's own numbers hint at it. Its spring retirement offer, which went to long-tenured employees on richer terms, drew about 30% of those eligible. This time, the company points to peers who saw closer to 5–6% leave. That's a small number. But for a leader, the size of that number matters less than its composition. In other words, is Microsoft reducing their talent pool, or just the talent in their pool?

So here's the diagnostic you can use: if you opened the door tomorrow, who would walk through first?

You don't need a 60,000-person program to run this test. Make three lists for your own team:

• Who has the most options outside?
• Who has stopped bringing you ideas?
• Who would you fight hardest to keep — and do they know that?

If those lists overlap, you have a retention problem that hasn't shown up in your numbers yet. But, trust me, it will.

The people who leave first rarely leave over money.
They leave when the work stops lining up with who they are and what they want their effort to add up to.

I dug into exactly that in my research on why your best people leave.

And if you're the one hovering over the exit button, figure out whether the problem is the job or the fit before you click.
That's what Limitless is built to diagnose.