I read an article recently about the CEO of EY (a professional services firm) saying that he’s not worried about employees leaving his organisation.
He is quoted in the article saying:
Today we know our people are not likely to stay with us for their careers. They’re going to have five, six, seven jobs throughout their careers.
The article also stated:
Weinberger (CEO) also told Businessweek that a whopping three-quarters of EY employees are millennials, which is part of the reason why he anticipates that they won’t stay at EY for long.
I understand where he’s coming from. You can’t cry or panic every time somebody wants to leave your organisation. Sometimes retaining employees is difficult because they have aspirations that lie outside of what you and your company can provide.
As for millennials, well, it seems that they are likely to have multiple careers during their lifetime. It’s rare these days to stay forever and get the gold watch on your last day.
If your organisation is about churn and burn, retaining employees doesn’t matter
Professional services firms like EY are in a different position than many other businesses. They tend to have a churn and burn or “up or out” culture which results in most people leaving after a few years if they aren’t getting promoted. And that’s just how these companies like it.
Consulting is a transient business. You often work on projects with a relatively short duration and then you move onto the next client. That’s why it isn’t really pivotal for EY to retain all employees. Often every piece of work is very different, meaning that you don’t necessarily require the retained knowledge, except at the top level, where they generally direct the projects from.
As for Tax and Audit professional services, it’s a similar story. Short bursts of grunt work led by experienced directors and partners, then onto the next gig. Graduates flock to these organisations from university, are worked to the bone, get their Chartered Accountancy (CA) certification paid for, then get out of there. This happens a lot, and it’s basically the accepted norm.
Because these professional services firms are well known international brands, they are attractive on a CV. As a result, there is never any shortage of applicants to fill the “grunt work” quotas on projects.
For these reasons, it doesn’t surprise me that EY doesn’t worry about retaining employees. They simply need to make sure there are enough satisfied people at the top levels who know how things run. The focus of firms like EY is external. They work on other companies problems rather than their own, so retaining that business knowledge is less important.
In many businesses, retaining employees is critical for holding organisational knowledge
Many other organisations are in a different position. Retention of organisational knowledge is critical, as roles increasingly focus on “knowledge work”. If your organisation depends on knowledge workers to understand how the business operates in order to work on their own internal challenges, then retaining employees becomes more important.
One simply can’t document every piece of knowledge in an organisation. Organisational knowledge is built up and accessed through the experience of their employees who remain there for an extended period. No matter how much of your organisational processes and rules are documented, nobody could be expected to come in, do some reading and be effective in the short term.
Retaining employees gives organisations and teams the capability to adapt quickly to changing circumstances because people know how the business operates. They are unable to start from scratch every month, they need continuity. This is in stark contrast to professional services firms who often start new projects from scratch, relying on the retained knowledge from client employees.
Be wary of the tendency for leaders to dismiss the importance of retaining employees. Depending on your team and organisation, retaining employees could be the most influential thing stopping your business from biting the dust.
As a thoughtful leader, it’s up to you to determine how important retaining employees is for your team. Not many leaders are in a situation where they can afford to ignore it.