There was a recent article in Legal week on the 19th July 73% highlighted two major findings in a recent Law Society publication on staff retention and quality of life said there were problems with employee retention and 58% identified problems with employee engagement. Interestingly enough, there has been an article in this weeks Economist looking at how Accountancy firms deal with this issue. For us knowledge management practitioners, who are interested in the people aspects of KM, this article should be required reading.
We all know that as a knowledge based organisation, people are our only asset not only for their knowledge but also the network links that they have both internally with other staff, but also externally with clients. Also as the market gets tighter, the problem comes from attracting and retaining the brightest people to work in their organisation.
Perhaps we need as a business to set time aside to set targets not only for retention, but also how our managers are encouraged and rewarded not so much for the time that they bill as much as they can but also how they manage and develop the people under their sway. As lawyers if we are setting time aside in terms of billing hours for our clients, can we also consider using that same system to encourage leaders in the firm to set aside time for that development but also to ensure that they are not disadvantaged in terms of future pay rises and possible promotion.
We also need to consider our staffing levels more closely - because job cuts say at this time might come to haunt us a few years later when we need the staff when the cycle turns upward. We must also remain aware that agents have a vested interest in encouraging people to move. As the article highlights "Recruitment consultants charge as much as 30% of an associate’s salary for their services, so they are keen to promote ‘churn’ in the firms they service.
The loss of expertise to a firm is serious, as are the potential lost clients and the knock-on effect on morale when good people leave. Day-to-day, there is the cost of cover and reassignment of files. When the new associate is hired it will take time for them to settle in and be inducted into the way of the firm, so it is not surprising to read that turnover costs can reach £150k for each £50k worth of salary."
This probably also doesn't include the lost knowledge element, which I would consider might cost another significant sum the person gets up to speed etc etc as well as the loss of innovation, possible costly errors, less efficiency as well as in terms of significant loss the ability to deliver on the firms strategy.
Of course this loss may be offset if you pursue a good alumni strategy as I proposed to another firm both in terms of reducing costs to agents and possibly to act as recruiting agents. Organisations need to encourage that sense of emotional allegiance to a firm - because I believe that people will increasingly job hop but if they are quality people, then firms should keep in touch, so that people with increased skills might want to come back to you.
If you have a trainee lawyer for example, and they are say three years pqe. Then effectively you have a sunk cost of 5 years salries and training time invested in them. So the key is to get people to stay longer so that they don't get seduced in to leaving, which means that talent development needs to start earlier in peoples careers - even while they are trainees.
In my next post probably on Monday I'll be continuing this theme of talent management.