The Society for Human Resource Management (SHRM) estimates that when an employee leaves, a company’s total cost can reach as high as 90% – 200% of the employee’s annual salary. For example, it reports that replacing an HR manager at an organization can cost a company more than $130,000.
The cost seems exorbitant, but when you consider the time and money that comes with separation processing, recruitment of replacement employees, training, lost productivity and sales, it adds up quickly. In addition to the financial burden, high employee turnover can cost a firm specialized skill sets that give it a competitive edge, and make it more difficult to attract and serve clients to the standards they expect.
Retaining key employees can help position your firm as an expert in the industry, attract lucrative clients, and save it from hundreds of thousands of dollars in turnover costs. It isn’t difficult to reduce turnover if you have a strategy in place and are working diligently to foster a positive work environment. We’ve compiled some tips to help ensure employee turnover doesn’t become an issue at your firm.
Make communication a priority.
Lack of communication between employees and managers is a critical problem and can easily lead to increased employee turnover. Whether it’s that employees and managers don’t communicate often enough, or struggle to do so in a productive way, employees who don’t feel they can voice opinions without retribution are likely to become unhappy quickly.
“I have conducted hundreds of exit interviews and the one thing that has always been mentioned is a desire for more and better communication,” writes Suzanne Dodge, VP for DeWitt Stern Planning Services in an article for the Sacramento Business Journal. Let people know what is going on, what the future holds, what the company is excited about and what the executive leadership team have on their minds.”
Recognize top-performing employees.
We have posted previously on the importance of employee recognition and its effect on driving stronger performance, as well its ability to decrease workforce turnover. Statistics show that employees respond most positively when praise is paired with rewards and when crowdsourced feedback is used in place of or in addition to annual performance reviews.
Additionally, research has shown that companies who have implemented modern employee recognition programs outperform those that do not, yet 87 percent of organizations do not have them. Most employees are still being recognized annually during a performance review, or not at all.
Invest in your employees and your company culture.
Employees who feel their companies have invested in them are less likely to want to leave. In addition to paying them fairly for their service, experience and specialized areas of expertise, it’s critical that your firm invests in your employees’ training, and that they see potential for growth within the company.
In addition to financial benefits, it’s crucial that your firm foster a company culture that encourages open communication, the exchange of new ideas, and a healthy balance between work and home. Providing your employees with great benefits and investing in their advancement will help your firm attract employees with specialized skill sets and new clients who are seeking t hose skills.
Don’t skimp on the hiring process.
Hiring the right employees to begin with is a huge factor in workplace turnover. Some candidates might have the right skills and abilities on paper, but you need to make sure they will be a good fit in your organization, that they will be able to work well with co-workers, and that they exhibit traits and values that mesh with your company culture.
When considering a candidate for a position with your firm, be as thorough as possible. Consider conducting pre-interviews via video chat to narrow down your selections. When conducting interviews, be sure to ask questions that assess the candidate’s cultural fit, such as:
- “What characteristics of previous managers helped and hindered you in your last position?”
- “What type of work environment are you most comfortable in?”
- “How would your co-workers describe your work style?”
These types of questions will give insight as to how well the candidate will fit in with your organization and how he or she will get along with co-workers and managers. The better an employee fits into your firm, the less likely you will have to worry about he or she leaving and contributing to turnover.
Professionals who manage accounting firms are not only responsible for the profitability and quality of the firm, but they are also responsible for ensuring its staff is talented, recognized for top performance, and will continue with the firm throughout the duration of their careers – or at least for as long as possible.
It’s no small task.
The competitive landscape of the accounting field is constantly growing, changing and evolving, and accounting management professionals must be able to adapt to these changes, as well as understand and communicate them to key management team members and employees. Firms who stay current on the newest trends will be more likely to attract top talent, and in turn, profitable clients.
From new software programs that make accounting firm practice management easier, to employee recognition programs designed to decrease firm turnover rates, accounting management professionals must be aware of the resources that are available to them and knowledgeable about how they could be applied and implemented in their own firms.
One of the best ways to do this is only a week away.
June 18 – 21, hundreds of accounting professionals who help manage accounting practices across the country will gather at the Association for Accounting Administration’s (AAA) 2013 National Practice Management Conference in Detroit, Mich., to participate in educational sessions, networking opportunities and learn about emerging tools and technologies in the industry.
In addition to brushing up on topics such as technology, HR leadership, financial management and personal development, accounting management professionals will have a chance to meet and talk with vendors providing innovative software solutions and tools to help make managing an accounting firm easier and more efficient.
CE Convergence will be among the vendors and will be demoing its CPE compliance software, designed to help accountants (and compliance/HR professionals managing CPE for their staff) to more accurately and easily track and manage CPE. You can find out more about our products here, or just stop by our table and say “hi!” We’re looking forward to this event – we hope to see you there.
By Steven Potratz, MAT, Director of Education, Western CPE
There are few things more dangerous in business than irreplaceable personnel. If that person gets sick or leaves, a huge hole is left that no one immediately knows how to fill. For this reason it is critical that staff is cross-trained to know how to do others jobs and fill in should an emergency require it. But that’s not as easy as it sounds.
I felt the real pain of failing to create back up staff one time when a key person left. I’d known for months I wasn’t up to speed on her tasks and that more than 50% of what she did wasn’t repeatable by anyone else in the company, but I kept putting off cross training because we were too busy. I learned what busy was after she left as the whole team scrambled to pick up all the pieces that dropped. It was a hard lesson.
Creating back up staff is more than just having someone sit down and learn what another person does and how the task is accomplished. There are some key elements you need to pay attention to so the back up training sticks and you can have confidence in the cross training.
- The more critical the task, the more critical back up personnel selection is. If the task is simple, such as operating the postage machine when the office administrator is out, anyone can learn it. If the task is more complicated, like shutting down the nuclear reactor before it goes into meltdown, pay special attention to who is selected to train as the back up. (How’s that for extreme ends of the spectrum?)
- Don’t rush the training. The person being cross trained comes with a slew of emotions not normally present in a person training for their own job. These emotions will affect how they perceive and incorporate the training into their knowledge base. Make sure they have enough time to assimilate the knowledge, ask questions, and show their trainer how they would perform the task.
- Document the individual tasks thoroughly. This should hold true for all tasks in a company (see E-myth Revisted) but is especially true in this situation. The back up personnel, depending on the size of the task, will likely be feeling some stress over performing a task they don’t do regularly. Having clear documentation on the steps necessary to perform that task will ensure they don’t miss key points and will give them a greater sense of security while doing the work.
- Have back up personnel perform the task regularly so they can maintain their training. Learning a task and then not performing it for six months will put the back up personnel in a pretty tough spot. Their manager assumes they know it and expects performance but it has been so long since they learned it that they can’t remember all the nuances. This problem is greatly compounded if task documentation wasn’t performed correctly. Have the back up perform the task under supervision of the primary task holder on a regular basis. How often will depend on the complexity of the task.
- Have a plan if the back up personnel are also gone. This is where documentation really comes in handy because someone is going to have to try and do the task with little to no training based on following the documentation. This is also a good way to test the thoroughness of your documentation; give it to someone who hasn’t seen it and have them perform the task based on its instructions.
Cross training isn’t hard, but it is important and worth making time for now. Putting it off raises risk. It also has the added benefit of helping staff understand co-worker’s jobs better. My advice is to start with the most critical tasks and get them done one at a time. It keeps cross training from being too overwhelming to the management team.
Steven Potratz is a guest poster who manages an extremely useful and informative blog on training and development issues. Please check it out and subscribe to his posts.