A valued employee may leave your company for any number of reasons. All too often, it happens in a growing company when someone who used to have direct access to you is now separated from you by a manager or director.
There’s a high cost to losing this kind of key employee who had been so critical to your company’s early growth and success. Some of the costs are intangible – for example the loss of expertise in certain processes, a link to a specific client or vendor, and maybe even a domino effect if other employees suddenly see an opportunity to swim in new waters. Then, of course, there are the more tangible costs of losing and replacing a key employee: recruiting, hiring, onboarding, and training.
Experts put the cost of replacing a key employee at three to five times the employee’s salary. The higher the position, the higher the cost.
Try to minimize this turnover by actively communicating with these key people as the company grows. Yes, consider them for leadership positions, but don’t force them into slots they’re not prepared for. If they don’t get the manager of director slot they wanted or felt they deserved, truthfully explain your reasons and then try to carve out new areas of responsibility to keep them positive and engaged.
Never assume your best people, the ones that got you where you are, will stay forever, though. You should have contingencies for those situations. And as we’ve described in another blog, as you grow, don’t be over-reliant on people – develop processes instead.
- Who are your critical people?
- Are you over-relying on these key people when you could be relying on them plus processes?
Why this Challenge Must be Resolved:
Business continuity requires that you have contingencies for the loss of key people and their institutional knowledge, as well as processes that can help institutionalize their activity and contributions. Otherwise the loss of a key employee could destroy your business.
Need help with this topic or leadership coaching? Contact Mission Critical Teams.