The management guru Jim Collins once stated that:
“… the single biggest constraint on the success of my organization is the ability to get and to hang on to enough of the right people.”
It’s a problem that businesses across every industry and country have experienced at some point. Yet, professional services is a sector that particularly suffers. Professional services is joint third in attrition at 11.4% according to LinkedIn, while some organisations are known to have experienced attrition rates of over 25%.
Large professional services firms expect – and therefore hire for – a certain level of attrition. However, when attrition gets too high it can be damaging to the bottom line and future growth potential.
The cost of replacing an employee is estimated at 50-250% of their annual salary, depending on how in-demand their skills and experience are. Oxford Economics place the average cost of replacing an employee at £30,000, while one GroHappy client estimated that it cost them £37,000 for each employee that left the firm, including recruitment and lost productivity costs.
Often, firms with high attrition will find that they are losing their best performers, which can be really damaging to an organisation. Knowledge is lost, morale can be knocked and there is the opportunity cost of losing a key player who can help the company grow and innovate.
Read more on the visible and hidden costs of employee attrition here.
An over-focus on retention alone is a risk and simply focussing on reducing attrition could, arguably, miss a more important point.
When companies over-focus on ‘keeping someone’ the first port of call is often to offer a pay rise, yet this is not always an effective way to retain talent. When a pay rise doesn’t impact monthly income and lifestyle, then employees prefer culture and other company perks.
Increasingly leaders recognise that, since the vast majority of employees will eventually move on, the focus needs to be on helping people be their best whilst they’re with your organisation and to have a good experience working for you. Leaders should also be harnessing ‘boomerang’ employees.
While it’s helpful to understand about trends associated with junior talent in professional services, an even more important place to start is to understand the junior talent in your organisation.
As senior leaders in the organisation, it can be easy to make assumptions based on personal experience and perspective, which may differ significantly from that of the young people in your organisation.
Fortunately, there are some practical, engaging, collaborative ways you can learn more about the junior people in your organisation. Whether that’s drawing insights from effective exit interviews and engagement surveys or hosting ‘leader listening tours’.
92% of employees place ‘career progression’ in the top five things that attract them to professional services. Providing career support at pivotal moments has been shown to improve employee retention.
One of the Big 4 professional services firms, noticed high attrition among junior employees who were 4-5 years into their career or had newly-qualified. They found that offering personalised career support could help increase retention.
In one department, they offered a 3-day career workshop to help junior employees think about their career aspirations and opportunities in the firm. In another department, all employees at a certain level were offered a series of career coaching sessions with someone from the company’s Talent team. There was some uptake here, although it was sometimes met with scepticism on the level of confidentiality.
Recently, one department has been working with GroHappy to offer a technology-enabled career programme that helps junior employees to get clearer on what a fulfilling career means to them and consider opportunities to grow in/beyond the firm.
This is enabling the company to offer personalised career support in a way that is both independent, cost-effective and reduces the need to take employees away from client-facing, billable work for days at a time. More importantly, over 50% of employees said that they were more likely to stay with the firm after using GroHappy – you can read more on the case study here.
94% of junior employees place ‘learning and developing skills’ in the top five things that attract them to professional services.
However, one-size does not fit all, and what suits one employee’s learning style will not work for another. Importantly, junior talent are often digital natives, meaning that digital learning might be more appealing to them compared to books and in-person seminars.
Making time for learning is a key challenge for many employees. A mobile and digital-first experience across phones, computers, laptops and tablets can help people access bite-sized learning resources quickly and during spare moments.
Consider the variety of learning opportunities available to employees and communicate these clearly, in particular at the points in the year when people are thinking about their development goals and plans. Remind them of what learning is on offer in the company and beyond.
Most organisations adopt flexible working policies to enable greater autonomy over where, when and how employees work. Managing work around other life commitments is often a priority for junior talent, so it can offer a good way to boost retention.
Often junior employees in professional services might be expected to do long hours on client site. Establishing ways of working that both meet client and employee needs can be really valuable if addressed early, which all starts with an open, honest conversation.
When faced with a critical attrition problem, PWC had to take action. Young employees were leaving at a previously incomparable rate and weren’t being easily replaced by fresh graduates.
A survey of 44,000 PwC employees uncovered that discovered that younger employees didn’t specifically object to long working hours, it was more about how the work was done. They craved better connectivity – to use technology and have the opportunity to work remotely. They also found that non-Millennials wanted the same thing – greater flexibility to support their life commitments.
As a result, PWC rolled out a new flexibility plan. Now, 90% of PwC employees incorporate some kind of flexibility into their schedules.
There’s no silver bullet to improving employee retention. Building a culture where junior talent want to stay and build their career won’t happen overnight.
However, establishing a culture of honest career conversations and investing in development can play an important role. Equally, adopting an experimental mindset, to see what works in your organisation can help bring employees with you on the journey.
Taking the time to understand your junior talent is important to ensure that, as a leader, you have your finger on the pulse of what really matters to them. This enables a clearer line of sight for how you can improve employee retention when needed.
Indeed, embedding a culture of listening and learning may enable a naturally lower attrition, whereby junior employees feel included, listened to and valued.
However, if you are looking to move fast on improving employee retention, start by providing better career development support for priority groups. Consider how best to enable this career development in your business – whether through in-person workshops or modern technology solutions.
Equally, consider promoting opportunities for development and working flexibly to meet the expectations and needs of junior talent today.
Contact us at GroHappy to hear more about we can support on junior employee retention in your organisation.