Why Do you Have Turnover?
May 10, 1999
Having a hard time keeping your staff? Are your new graduates working a year or two and then moving on? Are your mid-level folks, just below principal, moving on before you move them up?
If you answered “yes” to any of these questions, you are not alone. Lots of A/E/P and environmental firms are in the same boat. And even though industry turnover rates are down to the 12-13% annual range, any turnover is hard to take today because it’s so darn difficult to hire.
But while firms that are having turnover problems are not alone, it usually doesn’t take much for us to diagnose why. Most likely the turnover relates to one or more of the following:
Vision for growth. Employees want to hitch their wagon to a firm that is a rising star. It’s not good enough to just be a part of a highly profitable company if the firm is not really growing. The opportunity for the employee to do more, learn, and be excited comes from the growth. Continuous emphasis on profitability over growth can give people the idea that you aren’t interested in growth. They respond to what you talk about. I cannot tell you how many owners I have worked with who said they didn’t want or need a lot of growth and then gripe to me years later about their stratospheric turnover rates!
Ownership. If the firm has only one, or a few owners, or is a family business, you’re going to have higher turnover. You may need to find a way for more people to have a chance to invest in the company. Everyone in this business wants to be an owner—it’s part of our industry’s culture. It’s not good enough (for lots of folks) to just be employees, no matter how much money they make. If, on the other hand, you can say “yeah, we’ve had turnover, but we have still grown to X size in spite of it and make good money,” then maybe the turnover is not really a problem you need to be worried about.
Work environment. People today, especially younger ones, want flexibility in work hours, dress, and other things. They want to be able to have a child and get there at 8:30 instead of 8:00 if that makes the whole day easier. They want to be able to wear their Clark’s suede shoes instead of their Johnston and Murphy wing tips. They want natural light. They want to see fewer private offices. They want a more exciting set of surroundings than the traditional engineers’ offices with all of the private spaces surrounding the perimeter, hogging up all of the natural light, and the peons in the center in cubicles. They want raised ceilings. They want better acoustics. They want to see toys and props and moving video images that stimulate them. How can you fight this? You can’t.
Information. Employees want and need good data on how the firm overall is performing. The old days of information being provided on a “need to know” basis are over. This whole idea of open-book management is not a fad that will turn into a Dilbert comic strip joke. It’s real. It’s how you train your next generation. It’s how you get people to understand the financial dynamics of the business so they can make good decisions. Not giving this information to your people is like spoon feeding them details to draw without telling them what kind of facility you are designing! They are bound to make mistakes and bad decisions out of ignorance!
Geographic locations. There are some small cities and rural areas where it’s almost impossible to get people to move. It’s too risky. If the job doesn’t work out, then what? A complete relocation is in order, and it may take years to sell the house. It’s also harder for spouses to get jobs in some of these off-the-beaten-path locations. Then there are certain larger cities (like Houston) that are still tough to recruit people to. It’s too big, has a bad public image, and there are too many competitors just waiting to steal the people you just moved there. This means that firms may need to build up other locations out of recognition of the fact that it may be easier to get people to work there.
Hire the right person. You may just not have gotten the right person in the first place. If you hire someone who tells you that he quit his last job because he had to work weekends and that is a regular occurrence for someone like that in your firm, maybe you ought not to hire the person. Or if you need someone with an Arkansas DOT background and you hire a municipal engineer, it’s possible that the employee cannot adapt. You have to make the right hiring decisions, too. No firm is for everyone, and that’s O.K. But this may require you to spend money on recruiting!
Originally published 5/10/1999
About Zweig Group
Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.