Call it the Great Resignation or Big Quit … the fact is talent turnover is happening and it is costly. Leaders cannot blame this attrition on economic and demographic conditions alone. Instead, complacency of firm leadership also feeds this costly loss of talent. But you can take steps to minimize the costs and challenges that result from increased turnover rates.
When combining the tangible and intangible costs of turnover, estimates range from 1.5-4 times the position’s salary to replace each person based on employer experiences.
In addition to recruiting costs, tangible costs include:
- lost productivity or revenue generation from the unfilled position
- lost production while conducting interviews
- lost productivity while onboarding the replacement person (which can take weeks or a year depending on the complexity of the role being filled).
Intangible costs are harder to measure and quantify but do have an impact. They include:
- the hit to team morale
- the negative impressions created with clients
- erosion of the firm culture
- possible negative testimonials in the market making it harder to recruit talent and clients.
Please note, concerns over these costs should not prevent you from firing an underperforming or toxic staff member or partner because there are costs associated with keeping these people onboard as well.
The cost of undesirable turnover makes it clear just how imperative it is to stop the quitting trend. Firm leaders and HR professionals must implement solutions to retain and engage quality talent.
Josh Bersin, an author and global thought leader on talent, suggested that the pandemic did not create the “Great Resignation” but instead the “Great Migration.” He pointed out that people are “migrating from ‘crummy jobs’ to ‘better jobs’ and from ‘companies that don’t seem to care’ to ‘companies that really really care.’ And for many workers this means moving to companies with opportunities for growth, promotion, and even a new industry.” As the profession continues to struggle for talent, it is time to pause and reflect on what matters most to our talent.
We must create firms that talent want to be part of and grow within. Turnover and the associated costs go down when we become a destination workplace. Current staff do the recruiting by telling others about their wonderful experience working at our firms and posting testimonials on Glass Door and other sites that establish a positive reputation in the profession. Talent seek out firms with engaged, enthusiastic team members.
So, how do we create content, happy talent with workload compression, a persistent lack of capacity, and people feeling burned out and disengaged? With client demand holding steady and another busy season approaching quickly, we have to make changes, and make them now. Your team needs to see progress and feel hope. So, what can be done?
1) Address capacity challenges. There are several activities you can take to show your talent your commitment to relieving the compression and adding capacity.
a. As soon as the next busy season ends, fire some clients. Every firm has clients that are not a long-term fit, or that frustrate your talent. We have declared October 21 “National Fire Some Clients Day”; set a goal to let go of some clients on this date.
b. Next, contact an offshoring, outsourcing, or fractional staffing company. Begin the process of adding resources from these companies to provide support to your talent.
c. Lastly, take a good look at the tasks your people perform and identify what can be performed by new roles filled with client-facing administrative staff. These customer service professionals can follow up on missing information, setting appointments, teaching clients how use portals, scanning and uploading client information, and a myriad of other tasks that don’t require an accounting graduate.
2) Demonstrate you care. The old adage “people don’t quit their job -- they quit their boss” is true. Though we may not call them “bosses” anymore, the leaders that influence a person’s daily job and career have a significant impact on their level of satisfaction and connectedness to the firm. Not everyone is good at tethering their people to the firm.
a. Take stock of who is serving as each employees’ “shepherd” or primary tether for the firm. Are there people that don’t have someone who owns checking in on them and supporting them regularly? Every employee and partner should have a shepherd assigned to them. Someone to ask:
i. How are you really?
ii. What work do you really enjoy that you’d like to do more of and why?
iii. What work is less enjoyable that you’d like to do less of and why?
iv. How can I help you?
Teach your shepherds these questions and make sure actions are being taken based on what they hear.
b. Gallup has indicated that people who have a friend at work are more engaged. Friends care about us. With many people working remotely, be intentional about creating virtual and in-person networking events and fun so people have an opportunity to meet across the organization. There may be people on other teams that your team members can really connect with. In the remote world, leaders need to create opportunities and events for people to meet.
3) Ask what motivates each person. In place of designing a one-size-fits-all incentive program, ask your team what their top motivators are. Even if you have done this before, what motivates us most changes over time, especially after major life events. Compensation is just 1 of the 9 professional motivators, but with the inflation rates being what they are this may have elevated importance for some, and be aware that the average increase at this time is 10%. When you ask your people to identify their top motivators, share the results with leadership and their shepherd. Then, begin working with them to find ways to engage their top motivators.
Choose one of the items above to change this fall and start sharing your plans now! Make sure your people see action taking place so they know things will be different this next busy season. Choose 1-2 things that will make a difference and progress them in next few months.
Commit to change something and keep your promises. Not every organization is experiencing high rates of turnover. You can curb quitting at your firm and your talent can be retained.