Unplanned turnover is a fact of professional life; a cost that is baked into every business, a well-known cost of putting out your shingle. Sure, we all have to do a little extra to take up the slack of a comrade that exits stage left, but hey that’s how it goes, right? It’s part of our jobs as managers, or as peers.
That may be true, but as leaders and managers it’s also our job to quantify costs whenever possible, and find ways to drive them out of our business when they add no value. There have been many studies quantifying the cost of turnover, taking the impact from one amorphous cost, to one we can get our arms around and have a fair fight with! An especially interesting summary of costs is found here:
http://humancapitalstrategy.blogspot.com/2009/04/calculating-employee-turnover-cost.html
The article shows IT positions to be especially expensive to replace – between 200% and 400% of annual salary! Can this be possible? Sadly, yes. It’s no news flash that all organizations rely on a technology infrastructure to keep the blood moving, and when those systems don’t work well, hundreds or thousands of people’s productivity can be impacted.
Many companies, especially smaller organizations, have a (spoken or unspoken) reliance on one or more domain-knowledgeable IT team members, the guys/gals that hold the keys to the kingdom. It doesn’t matter how good your documentation is, you just can’t write everything down in a way that will lead to a smooth transition in the event of turnover. The diagram below helps explain why there is such a high cost. Notice the dip after the replacement team member starts – yup, that’s over-the-shoulder time from another team member:
So how do we stop this cycle? The answer is one we all know intuitively, but is difficult to make happen in practice:
Hire the right IT team members for the role, and pay them well enough to hold onto them.
What’s well enough? Culpepper and others say that compensation at the 75th-95th percentile for a given job category seems to keep unplanned turnover down – way down.
Sounds easy, but what exactly are the right skill sets for a position? How do you find the right range without overpaying? TopLine can help – check out our professional staffing methodology here:
http://www.toplinestrategies.com/it-staffing
Tags: project process, Turnover
