Recruiting is good, but retention is better…

Posted by Jim Stroud

September 22, 2006

It’s like clockwork. Every year a portion of our top talent decides it’s time to move on. Once those bonus or holiday checks are cashed, the flood gates open and the resignation letters start flowing in.

I work in a large company and this is a problem that we have with our IT and Sales groups in particular. I reached out a to a few peers with other companies (one is an IT exec and one is actually a Group President) and as an exercise, we took a bunch of historical data and started identifying the factors that led to the annual exodus. We focused only the top 20% of the employees from a performance standpoint. It’s not that the remaining 80% is unimportant, however, from a productivity, growth, and brainpower perspective, the top 20% of any group is critical. Moreover, these are the employees that are very difficult to replace.

To do this, we reviewed notes from exit interviews, cross referenced annual reviews and ultimately came up with 178 voluntary terminations from people that would have been considered in the top 20%. To try and keep focused on macro issues, we consolidated the responses and placed them into categories:

Money
Unchallenged
Too Challenged
Dead Company
Watch your Levels (and the BS)

Here is the breakdown of the categories. I know someone is bound to ask why it doesn’t add up so… Please keep in mind that this will not add up to 178 because several people insisted on listing 2-3 reasons when the question only asked for 1 reason.

Money:

This one was obvious however we found some interesting nuggets of information:The Stats: Of the 178 files, 83 people listed money as a reason for leaving. 62 listed it as the only reason In those 62 cases, only 8 were at the top of their pay scale - so there was still room to earn more.

Roughly 46% of the employees that left did so because of money concerns. To be honest, I thought this would be a much higher percentage. I think the most alarming stat to me here is that only 8 out of 83 (9%) people had maxed out their pay potential. Keep in mind that these are top employees that would have received above-average pay increases. My assumption is that they viewed changing companies as the faster path to higher earnings despite the fact that there may have been additional promotions available (which was the case several times).

This may mean a few things…

READ: Why top employees quit…

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