Phyllis Weiss Haserot's
Organizational Effectiveness Issue of the Month
WHO'S WATCHING TURNOVER?
May, 2003
Hard to quantify "soft costs" do affect financial performance - and the markets are watching. Personnel retention or turnover, productivity, strategic staffing, successful recruiting and training influence a firm's ability to meet and exceed client expectations and ultimately, the bottom line. They affect marketing success.
Corporate workforce issues increasingly are being monitored by industry analysts in the financial markets. Among the data that research analysts are gathering to advise investors are employee turnover figures both industry-wide and on an individual company basis. They look at industry studies, news reports, and whatever metrics they can find.
Both stock and bond analysts are becoming more sensitive to employee loyalty and performance. One analyst said he gives preference to companies that have been designated for recognition regarding workforce stability or satisfaction, believing that earning those recognitions demonstrate a deliberate consciousness on the part of management. Bond rating specialists are looking at workforce stability and vacancy rates in evaluating healthcare organizations, for example.
As investors give more weight to workforce issues, employers will give them more attention. This sensitivity will trickle down to influence organizations that are not publicly traded as well. That includes professional firms, which are eventually persuaded to pay attention because of pressure from their clients. As with cost and diversity issues, companies want to see low turnover from their service providers. So "heads-up!"
In professional firms, the issue of "stability" itself has not been focused on other than when a firm was in danger of dissolving. In fact, the system often encourages turnover with ceilings on career development except for the increasingly fewer proportion of professionals who are selected as partners or shareholders. Most tracking of turnover pertains to lateral moves (mainly what firm has "poached" who from another firm) or reporting of layoffs when business is slow. Few firms have accurately recorded turnover by cause and calculated the (high) costs.
Another personnel crunch and "war for talent" is coming - inevitable given the demographics of the current work force. What can a firm do to assure that financial performance and marketplace "buzz" attributable to soft costs is positive? Here are some strategies:
* Set up a system to track as accurately as possible why people leave and the real cost of turnover. This will require exit interviews. Don't avoid hearing bad news. Listening and acting on it will allow the firm to fix what needs improvement.
* Develop workable and usable flexibility policies that benefit the firm and personnel in both good and bad economic times. When work is slow, ask for volunteers for cutbacks in hours. This avoids layoffs and their negative impact: poor morale, client dissatisfaction with turnover, loss of working client relationships and knowledge of clients' business and needs, as well as the costs of hiring and training replacements when they are needed. In thriving economic times when professionals are sought after by other firms, flexibility in hours, work location and staffing policies will increase the retention rate and avoid the negative effects listed above.
* Give professionals the training and coaching they need to be most productive. They will want to stay with a firm that assists their professional and career development. (Banish the fear that you are training people who will leave to go somewhere else. People stay where they feel they are growing.)
* Encourage supervisors to give frequent feedback to the people who report to them. Timely feedback, delivered in a candid but sensitive manner, is prized by everyone and is too rarely received. Gallup studies and others have found that the number one reason people leave their organizations is insufficient attention from or poor treatment by supervisors (regardless of the competence and vision of senior management)
* Make overall good treatment of all personnel a core value of the firm and don't tolerate exceptions. The word will get around to recruitment candidates, schools, professional associations, and the press - that serve as your "industry analysts" - and to clients, who invest their confidence and their money in your firm's performance.
Please e-mail me your comments to start a dialogue at pwhaserot@pdcounsel.com or "Contact Us" at www.pdcounsel.com.
© Phyllis Weiss Haserot, Practice Development Counsel, 2003. All
rights reserved.
You may forward this e-Alert on to as many people as you like with proper credit and attribution. Publication rights will be granted upon request for permission only.
To be put on the list for a free subscription to this e-Alert, send an e-mail to pwhaserot@pdcounsel.com with "Organizational Effectiveness" in the subject line.
tel: 212 593-1549
fax: 212 980-7940
About
Us | What's
New? | Next
Generation | Coach-for-the-Coach
| Flexible
Firm
AuthenticWorks
| Conflict
Resolution | Collaborative
Culture | Lateral
Integration
Publications
| Org.
Effectiveness | Contact
Us | Home