Successful companies depend on finding and retaining talented employees. Attrition, on the other hand, is expensive. A constantly revolving door means more money and time spent training new employees, makes it hard to build effective teams and can undermine company morale. Family businesses may have a particularly difficult to path to tread in this regard: retaining non-family member employees is a constant issue in family businesses.
Even beyond the family/non-family concerns, however, some reasons for talent departure are obvious; dissatisfaction, better opportunities elsewhere and relocating for family exigencies are common, intuitive reasons for the expensive ebb and flow of human capital. A recent study by corporate think-tank CEB, which was reported in the Harvard Business Review, analyzed social media posts to reveal some fresh insights into why and, perhaps more importantly, when employees are heading for the exits.
One fundamental insight from the study is that employees are more likely to leave at times when they feel like their current position is not measuring up to their peer group. A few examples: CEB found that job-hunting activities increase
- 6-9% after work anniversaries,
- 12% after milestone birthdays (e.g., the big 40),
- and 16% after class reunions.
As CEB researcher Brian Kropp said, “the big realization is that it’s not just what happens at work—it’s what happens in someone’s personal life that determines when he or she decides to look for a new job.” Corporations are listening, and some are going to extreme lengths to turn back the tide of departing talent, even going so far as tracking email and social media usage (to identify networking that might indicate a job-search) and tracking entry and exit times (to identify employees who are slipping out for interviews).
Though some practices may seem intrusive, early detection appears to be a critical factor in reducing attrition.
CEB found that even after accepting a counteroffer, 50% of those employees will still leave the company within 12 months. Corporations that are paying attention to these early warning signs have already begun to reap the benefits. Credit Suisse estimates that its success in reducing attrition has saved it between $75 million and $100 million.
Read more insights on this topic from the Harvard Business Review, here.Kennard Noyes focuses his practice on corporate finance, securities, mergers and acquisitions, and general corporate law. He represents clients in both transactional and regulatory matters, including debt and equity financings, mergers and acquisitions, and regulatory compliance issues. Ken can be reached at kennardnoyes@dwt.com, or directly at 206-757-8225.