Core Business Best Practice-The Baseline Economics of Staff Retention
If you’ve ever wondered why some employment-related buzzwords like “restructuring”, “downsizing” and similar euphemisms for shedding staff always seem to get a collective groan out of employment experts, there’s a very good reason for the lack of enthusiasm. These practices have become synonyms for “business worst practice”. In the name of a few dollars of short term costs, jobs and skills are lost forever. There’s another term which is now best practice in employment, and it’s a working verb, not a buzzword- Staff retention.
Staff retention has become a major issue in global employment largely due to the slash-and-burn employment practices of the past. It’s been found that these destructive practices have multiple issues, but the worst problem is that shedding staff also affects business productivity very negatively.
These problems can become systemic in a business structure, unless corrected:
· Restructuring- Even in a multi-tasking environment, restructuring can be a serious own goal for businesses unless job design can guarantee improved productivity and avoid loss of capacity. Doing more work is one thing, doing more business, which requires more labour and management is something quite else.
· Downsizing- A practice having a nasty tendency to look good on an initial balance sheet and deteriorate in subsequent years, downsizing has all the drawbacks of restructuring with a built-in liability to creating physical limitations on businesses. Again, job design is a core issue, but the problem remains that there’s a high risk of business stagnation. If a business downsizes to the point it can’t take on more work, or is limited by its skills base, it suffers the consequences of stagnant revenue and loss of performance capabilities.
Both these practices are effectively accounting solutions, not management solutions. They’re cosmetic in terms of business development. “Saving” money doesn’t necessarily mean generating more business. The most optimistic, upbeat financial projections for expanding business usually tend to gloss over the fact that the workload on the business will therefore increase and don’t address the real costs of expansion of operations. If you want more sales, at some point you’ll need more salespeople.
The logic of staff retention
Staff retention works on a “conservation of skills” basis. Many business operations require human skills, like client relations, sales, and operational expertise. These are fundamental business skills. Losing the staff with these skills is bad business. The whole idea of staff retention is to retain staff with a good working knowledge base, an understanding of specific business needs, and those able to train staff in these areas. These staff are built-in enablers for business performance. It makes no sense at all to lose their skills.
The other issue for employers is the real value of staff. In recruitment consultant jobs, for example, there are major issues in terms of staff skills. Experienced recruitment consultants have a very wide skills base. They also have strong client relationship skills, and are business-builders as a result of their roles. Logically, retaining these skills is demonstrably measurable better business for recruitment firms.
The same general principle applies to sales, administration and other core business functions. Staff retention provides a guarantee of business performance. Experienced high value staff shouldn’t be lost in any form of reorganization. They’re the drivers of success. They’re also the people most likely to find solutions to the problems that restructuring and downsizing never seem to solve. Keep your talented people and lose your “quick fix” advisors. You’ll never regret it.