Similar to the real estate market where there are buyer and seller markets, in the recruiting world there are employee and employer markets. With the upturn in the economy and the baby boomers starting to retire, talent is limited and it is now an employee market in highly specialized fields of professional services. As more baby boomers continue to retire and leave the workforce, the labor shortage is expected to continue to grow.
Talent acquisition and retention is particularly important for professional services (PS) organizations because they are “people businesses.” It goes without saying that for these firms to succeed and grow they depend upon good people that have the knowledge and skills to drive performance, productivity and profit. They are the key to achieving a competitive advantage. So doesn’t it make sense that firms spend a significant amount of time identifying and implementing meaningful ways to attract, manage and retain good talent?
One way for firms to approach the problem is by addressing three key questions:
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What are you doing to keep your best talent?
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How much revenue are you losing per year through attrition?
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What will happen to your firm if you don’t address the issue of talent retention?
What are you doing to keep your best talent?
There is a misconception among employers that most employees leave to earn more money. In reality, most employees leave because they feel they are in dead end positions and no longer growing and moving up to more challenging roles within the organization. This feeling of stagnation leads to attrition which directly impacts company profitability.
How much revenue are you losing per year through attrition?
Typically, it costs between 90% and 200% of an employee’s salary to replace them. When you calculate the cost to hire and train people only to lose them through voluntary attrition, the cost can be staggering. What’s particularly worrisome for most organizations is the risk of losing senior staff who are the face of the firm and have a loyal client following. You cannot afford to have these employees leave when it can be prevented. Remember, your talent is being targeted every day by your competitors.
What will happen to your firm if you don’t address the issue of talent retention?
Companies with great reputations and strong cultures are able to attract exceptional talent. People want to work for them, so it gives them the ability to be incredibly selective. At the same time, these companies know exceptionally talented people are also ambitious and have high expectations.
Therefore, these companies know they must double down on their efforts to keep their staff motivated and inspired so they want to stay. Great projects, good tools, career planning, training, and mentorship programs are some of the ways they focus on retaining their talent. They identify their top talent and frequently and openly acknowledge them as top performers. Organizations that succeed in talent retention have very skilled, very experienced people which in turn leads to higher billing rates, higher customer satisfaction and higher profitability for the firm.
If you don’t address the issue of talent retention it will be the opposite. Your best talent will begin to leave first – taking all of that experience and knowledge with them. This situation can easily snowball and negatively impact your project performance, billing rates, customer satisfaction and profitability.
Therefore, it is important to address the problem immediately. Identify why staff is leaving: what challenges are they facing and what is making them leave? Take what you learn and build a strong talent management plan – one where your people are front and center, invested in and want to stay for a long time.
This post is based on the just released book, Deltek Special Edition, Talent Management for Dummies. For more information, contact us for a copy of the book here.
Make sure to register for the remaining webinars in the series
June 16 Finding Qualified Talent Fast
July 21 Retaining Top Talent
August 9th Investing in Your People
September 14 Leveraging Technology to Manage Talent