A few days ago, I read the phrase "If you can't offer advancement within your firm, coach your team on advancing outside the firm." on a LinkedIn post by Mark Stovel, creator of FirmNexus and accounting influencer who shares insights on how to grow your practice in a changing world. This phrase caught my attention because it challenges the conventional wisdom of talent retention in the accounting and finance industry.
Usually, employers try to retain their top talent by offering them opportunities for advancement within their own organization. They invest in training, mentoring, and promoting their employees, hoping that they will stay loyal and committed to the firm. Ans it works: according to a survey by Robert Half, 64% of accounting and finance workers said that career advancement opportunities are very important when evaluating a potential employer.
However, for smaller firms, it's impossible to offer this wide range of opportunities. You can aim to build capacity by lowering your costs, but in the meanwhile a shorter approach may not work for all employees, especially those who have high aspirations, diverse interests, and entrepreneurial mindsets. These are the A-players who are always looking for new challenges, learning opportunities, and career growth.
Engaged in the moment is better than not at all
Advancement for everyone is unrealistic, and pretending to maintain a steady engagement for several years is as difficult. So, for peace of mind and better decision-making, we need to normalize that:
- A-players may only be with you for 3 years
- Annual performance reviews are archaic
- It's ok to help your team plan their next steps.
What you are looking for is to make the best out of your team for the moment they can give you right now. Instead of trying to hold them back or make them fit into our predefined career paths, we should help them achieve their personal and professional goals, even if that means leaving our firm. This way, we can build trust, respect, and goodwill with our employees, and create a positive reputation for our firm.
Tips to help your team plan their future
#1 Have regular and honest conversations with your employees about their career aspirations, strengths, weaknesses, and development needs. Ask them what they want to learn, where they want to go, and how you can support them.
#2 Provide them with feedback, recognition, and encouragement. Celebrate their achievements, acknowledge their contributions, and appreciate their efforts. Give them constructive criticism, suggestions, and guidance on how to improve their skills and performance.
#3 Connect them with relevant resources, opportunities, and networks. Share your knowledge, experience, and contacts with them. Introduce them to potential mentors, partners, or clients. Recommend them for projects, assignments, or roles that match their interests and goals.
#4 Encourage them to explore different options and possibilities. Help them discover their passions, talents, and values. Challenge them to step out of their comfort zone and try new things. Support them in taking risks and learning from failures.
#5 Respect their decisions and wishes. If they decide to leave your firm, don't take it personally or react negatively. Instead, congratulate them on their new venture and wish them well. Stay in touch with them and maintain a good relationship.
With a little luck, you would have 3 end results:
- Keeping your high-quality and performing employees motivated for a little longer.
- Help them grow and succeed
- Attracting more talent to your firm by showing that you care about your people and their future.
Building a name in the labor market is as important as it is to watch out for your turnover rate.
Why Low Employee Turnover Isn’t Always Positive
While high employee retention is typically seen as a goal for businesses, it's not always the best indicator of organizational health. An unusually low turnover rate might suggest possible issues within the company. Such low rates could mean the presence of underperforming employees or lead to frustration among top-performing staff.
There's no universal "right" number for employee turnover. While Gallup suggests a 10% turnover is healthy, the actual percentage can vary across industries and organizations.
For instance, Oracle attributes its high turnover rate to its adaptability to industry changes. In contrast, companies on Fortune’s Human Capital 30 list, known for their focus on human capital, report turnover rates between 3-5%.
To assess the appropriateness of your company's turnover rate, consider the following:
- Comparison: Examine the turnover rates of competitors, especially leading firms in your sector.
- Type of Turnover: Differentiate between functional turnover (low-performing employees leaving) and dysfunctional turnover (departure of top or highly skilled employees), as they have distinct implications for the organization.
Striking a balance
Remember, coaching your team on advancing outside your firm does not mean that you have to neglect your own firm's growth and success. You still need to balance the needs of your employees with the needs of your clients and stakeholders. It’s all about finding the perfect balance between your employee's needs and your firm’s needs.
