Professional services firms invest a great deal of time and resources in recruiting, developing, and retaining their talent. Talent is most important, and often the only asset they have. At the end of the day, professional services firms create value for their clients and make money by providing their employees’ expertise and time. Employee development and retention are not nice-to-haves, they are absolute must-haves.
How Does Turnover Affect You?
Simply put, if you are losing talent, you are losing money! Turnover is costly – turnover can range from 50% to 150% of employees salary. In extreme cases for highly critical employees, turnover can cost 400% or more of the employees’ salary. Costs include the billable hours, lost productivity, time spent on exiting and recruiting, backfill resources, and reduced morale and chain turnover.
Luckily, turnover is avoidable!
Below, we have outlined three steps that professional services can take to retain their talent.
How Can You Retain Your Top Talent?
1) Identify and prioritize core areas
Turnover rates will vary across functions, locations, tenure, age, and performance levels (most of these data points should already be found in your HRIS, billing, and your performance management systems). It is important to identify where the lowest and highest retention rates are in order to strategically invest in programs that will deliver the most impactful results. You have limited resources – you can’t tackle everything at once!
2) Analyze root causes
Once the areas with the highest turnover rates have been identified and prioritized, the next step is to analyze the biggest drivers for turnover. There are many drivers of turnover, but there are six that employees typically care about the most: alignment, development, feedback and recognition, relationships, compensation, and flexibility. These drivers directly influence employees’ engagement, productivity, and retention. In order to understand which drivers are the most problematic at your firm, you can leverage the following sources of insights: employee surveys. focus groups, 1:1 check-ins, exit interviews, and online company reviews.
3) Develop initiatives
Once you have identified the drivers of retention with the biggest problems, you will need to develop initiatives to solve the problems (and many of these initiatives do not have to be costly). Below we list some initiatives to implement to solve different retention root causes.
- Lack of alignment: cascading OKRs/KPIs or hosting a company “values day” in order to increase alignment and accountability.
- Lack of feedback and recognition: implementing real-time feedback processes and systems.
- Lack of employee development: implement mentorship match with non-managers and normalize career development conversations.
- Lack of strong relationships: lunch and learns, company retreats, happy hours, and game nights
- Compensation: transparent salary bands and non-cash benefits.
Remember that you may not be able to address all the issues – dig deep into the main drivers of turnover and prioritize initiatives that will bring the largest value.
You can’t prevent everyone from leaving your firm, but you can make their decision to leave tougher. You may even make a lasting impression encouraging them to refer to your business and, perhaps, even come back to work for you one day.