Friday, December 17, 2004

Retention is an issue, but not for us

Interesting article in Legal Week on recruitment and retention in the UK legal sector. Based on a survey of industry HR directors regarding key strategic issues facing their firms.

One part caught my eye:
The R-word is no longer redundancy, but retention. However, there is the rub. The research indicates that while 86% of respondents cite retention as an industry-wide issue, just 40% of them believe it is an issue for their firm.

Why only 40%? Well my guess is that they are all using the same HR benchmarking data which lets them compare themselves with industry averages. So just under half think that they are 'doing better than our competitors'.

Like most other industries much of the effort is being done at the top, with programmes for partners. This was type of approach was commented on by The Work Foundation in their excellent report Managing Careers in Large Organisations (PDF). Programmes focus on the top level of staff.

I absolutely agree that programmes should include the top level, but companies should be rolling them out, even in a watered down version, to all levels of staff. It is not just senior management who impact organisation performance, no matter how much our media like to jump on the myth of the superstar CEO (who on his own turns a business around overnight).

The Legal Week article also notes:
Certainly the costs of not getting this right are now being measured - more than 50% of the respondents claim to measure attrition costs, the most popular methods being through the measurement of replacement costs and training fees.

If you then look at cost per staff and multiply this up by the number leaving at that level you quickly get to some very big figures. If you look at the probability of staff leaving you will see that it is significantly higher if the person has only been with the firm a short time- one recent client lost 35% of all hires in the first year, but less than 1% of staff who had been with the firm for 20 years resigned.

In many firms new hires, especially the 'graduate population' gets great mentoring and development whilst they are on the programme then get nothing (other than a yearly review) when the programme finishes. And you are surprised that they leave?