The Costs of Retention & Turnover in a VUCA World, and What To Do About It
Nathan Eckel
Helping decision-makers solve painful, expensive (& embarrassing) headaches with data insights.
In my last post I mentioned the challenges high tech companies face with retention and turnover.
Today I want to give you an idea of what this is actually costing companies.
If you have ever had to staff a position or build a team, you are already quite aware of the physical monetary cost of recruiting from scratch. You’re aware of the alternative of using a staffing company.
I would like to talk about the far more expensive costs outside of money.
My counterintuitive hypothesis is that these costs are far more expensive because they are less tangible.
Of these costs, money is by far the least worrisome for your team. It is the most quantifiable and fungible.?The person you lost - especially if they were really good, is the least measurable precisely because of those ambiguous extra characteristics… the ones you didn’t notice, appreciate or reward.
We Are In A VUCA World
The organizational challenges of your division, team or department also compound when the military acronym VUCA is considered.
Our post-ish pandemic world is fully VUCA - fully
This means that the momentum you lost in a pre-pandemic world might now be compounded in unimaginable ways.
When you take action about the resource that you lost, you have to make an either or choice.?
This could work in some cases such as if your project is nearly completed and you are using contractors anyway.?If you’re working with employees, this is going to look patently unjust immediately. The remaining work will be divvied up and resentment will likely grow.
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2. You allocate resources to your HR department (if it has bandwidth), or an outside recruiter to begin the re-staffing process.?
Part of this cost is going to include your team’s time and focus due to interviews.?
There are going to be people on your team that have to be dragged into extra meetings, which they don't like.
Then there's money and reputation. I have already suggested reasons why money is the least expensive. Because it is the most quantifiable, it is the most fungible.
The ambiguous, unnoticed, unappreciated and “secret sauce” characteristics of the talent you lost is now gone. And your team now needs to absorb the loss.?Of course some team losses are less costly than others - especially if you were thinking about releasing that person eventually. ?
Conversely, it hurts to have a key person leave especially before mentoring a successor.
Remember the 5 documents I mentioned that will help you turn this around? ?
In my next post I will finally explain them to you and give you a primer in case you wish to get started collecting this data, and implementing your insights for greater retention.
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