By: Bill McCabe
Forbes - Turnover in the managerial ranks has reached epidemic proportions. Downsizing, mergers, early retirement, career shifts, and midlife crises are among the many reasons. Most people see this as an inevitable and not particularly disturbing fact of our volatile age. I see it as a major obstacle to productivity and profit.
As the chief executive of an advertising agency, I work in an industry plagued by turnover. When an agency loses a big account, its reflex is to fire people. As you might imagine, that doesn’t foster employee loyalty; most workers have little compunction about switching agencies when they receive an offer. Sometimes they leave not for more money or better positions but because they expect the agency to lose an account or engage in unrelated “cost-cutting” measures.
The problem grows from there. Clients are upset when an esteemed account, media, or creative person suddenly isn’t there anymore. Perhaps even worse, rapid turnover disrupts the work. Not only are there delays in projects when people leave and new ones must be brought up to speed, but knowledge falls through the cracks. The five- or ten-year veteran invariably takes a certain amount of savvy with her that is difficult to replace. Agencies dilute or even lose their identities when they can’t keep most of their people in place for sustained periods. In Chicago, if you look at the top ad agencies from 30 years ago and you look at the leading agencies today, you’ll see that many of the former aren’t on the current list, and that a sizable percentage of them no longer exist. And obviously this problem isn’t limited to advertising.
However, senior leaders can limit turnover. I know they can, because 50% of our own staff has been with us for 10 years or longer. That’s not because we pay better than other agencies or because we provide great perks and luxurious offices. It’s because we value continuity and have enacted policies to promote it.
Any organization can do what we’ve done, but it takes a leap of faith. If you’re cynical about employees, if you believe that loyalty is an outmoded concept, then you won’t take continuity-enhancing steps. If you’re convinced that greed trumps all else, that you can’t keep your best people for long because there is always someone out there willing to make them a better offer, then you should stop reading now. But if you believe that the majority of people want to grow with a growing enterprise, and want to develop and sustain relationships over the long term, then consider implementing the following policies:
1. Avoid downsizing and other mass terminations at all costs. Or, more to the point, cut other costs before you give people the ax. Forgo the Christmas party, limit expense accounts, reduce or eliminate bonuses. These are tough pills to swallow, but when your people understand you’re administering them to avoid mass layoffs, they’ll be more willing to swallow them.
2. Create a familial culture. That doesn’t mean talking about how we’re one big family and then taking actions that contradict the assertion. It means institutionalizing small and big policies that demonstrate that the company cares. Providing generous support for those who have to go on disability leave can be one. Being transparent—communicating important decisions quickly, soliciting feedback regularly—is a second. A third is holding events that bring people together, such as dinners and outings.
3. Define your values and hire accordingly. Do you believe that work comes before family, or that one must strike a balance? Do you feel that just about any tactic is valid if it lands a client, or are there higher standards you adhere to? We hire for knowledge and skill, but we try to determine if a job applicant is a good match in less tangible ways. What books is he reading? What is she passionate about outside of work?
These tactics don’t work 100% of the time. You’re always going to lose some good people. But they do significantly increase the odds that you’ll limit your losses and establish the continuity required to build a sustainable enterprise.
Bill McCabe is the President/CEO at A. Eicoff & Co., one of North America’s largest DRTV agencies.
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