Team Talk: The Smart Financials of Investing in Your People

(A Four-Part Series)

Part IV – Minimizing the Cost of Employee Turnover

In the past Team Talk blogs, I’ve talked about the “financials of people” including my philosophies about finding, hiring and paying the right people, the timing of growing your team, as well as ways to invest in your employees for business growth and retention.  Follow my advice, and the result will be one big happy business family. Employees will never leave you, right? Well, not exactly.

The reality is that employee attrition is a fact of any business. Personal circumstances change, new opportunities come along, and sometimes a job or culture just isn’t the right fit no matter how much due diligence was done on both sides.

Unfortunately, turnover impacts your bottom line in terms of productivity, hiring and training costs, and sometimes even client satisfaction and team morale, and it’s hard not to take a resignation or dismissal personally.

Fortunately, there are steps you can take to minimize these. Once again, a little bit of planning and analysis can go a long way toward protecting your fiscally fit organization. To help minimize turnover, our colleague in the Human Resource advises you do the following:

• Document processes. When things are humming along, make sure that you know what your staff is responsible for, how they accomplish it, that it is written down and regularly updated.
• Cross-train. The more you can partner and team, the lower your risk of an “operational blackhole” when someone leaves. Take the time at meetings to ask about and discuss changes in job requirements or processes.
• Reflect and get feedback. Attrition is not always related to an issue with fit. However, when there is a problem that leads to a departure, you should determine where the mismatch occurred.

You will want to remember to budget – ongoing, both money and time – for these expenses. If you have not done so and are caught by surprise, take the opportunity to go back to basics and re-evaluate your financials.

Before back-filling an open position, examine your revenue, your capacity, and your client demand. Review if it’s still a viable position and if the salary and job description are aligned with your needs. A practical assessment of your numbers will help you ride out the sometimes emotional waves of personnel changes, and make a rational decision about your long-term business health!