At some point, we have all experienced that sinking feeling when a valued employee walks in to let us know that they are leaving the firm.
After the shock come the questions, the finger-pointing and the blame. Working in a service business means understanding that the value of your business is entirely dependent on the people you count on to deliver that service. As our firms grow, leaders of advisory firms become more dependent on other people to maintain the standards that they have always believed in and delivered. High employee turnover is brutal for a service business.
We have almost 50 offices around the country, about 400 employees. We have partner managing directors in each office, each with their own unique way of managing people. Every year we have our employees complete a 27-question anonymous survey to get a sense of how we are doing. We also perform confidential exit interviews with every employee who leaves us. That gives us an interesting petri dish from which we can see the styles of leadership that promote high levels of employee retention and satisfaction or those that create less happy employees and high turnover. Let's discuss some insights into creating a dynamic culture within your office. As usual, I ask guiding questions that might be helpful for you as you think about this topic.
1. It's the boss' fault (it really is)
Far and away the No. 1 reason people leave their jobs is the actions of the person they report to. Ultimately, if there is high turnover, it is the person at the top who is to blame. The person deciding who to hire, where people need to work and how the office needs to act sets the tone for the entire organization. Unfortunately, we are all too eager to find someone else or some reason to excuse the fact that people leave us. Truth is, if we have high employee turnover, we as leaders are almost always the reason. Let's take a closer look at what else drives great people to leave a firm.
2. Inconsistency in behavior
Too often a high-service-minded adviser treats their clients like royalty and their staff like slaves (or does so sporadically). You cannot expect people who see you talk about treating others well accept being treated poorly. You also cannot expect people to feel good working for someone who is a loving coach on Friday, but a task master on Monday. Predictability and consistency in behavior of leadership are vital to a healthy team. People want to know what to expect, and if leaders cannot manage their own behavior, then they cannot manage a team effectively. Do you know what your team thinks about your management style? Do you ask yourself how you could have behaved differently to prevent someone from leaving, or do you find external justifications?
3. A lack of genuine care for the development of the individual
Everyone wants to feel special; all teammates want to know that they are cared for as individuals and that their leaders are personally vested in their growth and development. Nothing will increase loyalty more than managers seeing each person as a whole rather than as a worker. Creating a culture where supervisors are expected to take the time to coach and mentor their people is how every person will feel cared for. People want to know you care about growing their careers; they want their résumés to keep becoming more valuable. How much do you know about your teammates' desires for professional growth? Have you helped your teammates identify ways to improve and become more valuable in their careers?
4. Unhappiness about compensation
The amount that someone can get paid if they were to leave your organization is called “the floor,” and the value they are worth within your organization is called “the ceiling.” If your staff's salary is below “the floor” then they will always be looking at what they are giving up by working for you — this will make them a lot more dissatisfied. We sometimes take too long to see that our people are worth a lot more to the outside world as their careers mature (or when the market improves). Have you evaluated what the people who work for you are worth to your competitors?
Because many of us have legacy employees, the spread between “the ceiling” and “the floor” is often too high. Those employees will be very good about asking for pay increases and you often have little choice but to pay them. People in this situation can feel “trapped” because they know that no outside firm is likely to pay them what you do. The better long-term solution is to hire more people that are specialists versus having legacy positions that are too general. Is the team you have the one you would design today?
If any of your success is due to the work you have done, to take your business to the next level, your future success will depend on the work your team will do. Only you can make that happen, but it's a different job than the one you had.
Joe Duran is chief executive of United Capital and the bestselling author of “The Money Code: Improve Your Entire Financial Life Right Now." Follow him @DuranMoney.