You are surely aware that organizations are running "leaner" than ever before and "flatter" than ever before. That is, there are fewer people doing the same, if not more, work, and there are fewer layers of management than there have been. Both of these trends make planning for attrition more critical than it has been in the past. Attrition can occur due to retirement, downsizing, performance problems, and voluntary quits. Whatever the reason that people leave your organization, it will have more of an impact than such losses have had before because of leaner, flatter corporate structures. There just are not as many people to pick up the duties of the departing employees, and those who remain may already have very full plates. These facts make planning for attrition a necessity, and Performance Management considerations are central to that planning.
Companies have always had some level of awareness of the need to plan for the retirement of key players. They may not be so familiar with planning for the loss of talent for other reasons. A generation ago, it was not uncommon to have employees retire from the only company for which they had ever worked. Today it's rare. So attrition planning may involve reaching deeper into the layers of the organization as not just the top jobs are being vacated. One more twist on this theme is interesting. I'm aware of a company who has an entire lead team all reaching retirement age within five years of one another. They are from the "stay with one company" generation, and are therefore all about the same age, and will all leave the workforce at about the same time. This company has a real challenge ahead.
So if attrition is not just from retirement any more and could happen pretty at any time, how do you plan appropriately for it? And where does Performance Management come in? We are dealing with several factors concurrently. There is more attrition for reasons other than retirement, a tendency to "job hop," and smaller staffs with more far-reaching responsibilities. When you think about the situation this way, the need for excellent Performance Management and planning seems pretty clear. In other words, organizations must look at critical positions at all levels of the organization so that they have back-up plans in place, and so they can react quickly to the loss of critical employees, whatever the reasons for the loss.
Your organization almost certainly does annual performance reviews. Part of your Performance Management process throughout the year should include looking for ways to enhance your employees' skill sets, to expose them to new opportunities, and to make sure they are cross-trained at least within your department. This is a different attitude than was prevalent even a decade ago! Managers often operated in silos. Talent was guarded. Boundaries were solid black lines. That mind set just won't work in today's organizations. And employees today resent such a mindset. They do consider moving on when they become dissatisfied. Think for a moment about the two or three people in your organization you would most hate to lose. Well, I'm betting those are the very people most likely to leave if not challenged and rewarded AND who are most likely to have the opportunity to go elsewhere if they want to.
If your organization is looking at Performance Management only during annual reviews, you will lose key people, and you won't be ready to replace them. Think about it. In January, all your employees set performance goals for the year. Then in December, they pull out the goals and dust them off and write out how they performed against the goals which were set a year ago. It's hard to imagine that the needs of any business would not have changed in a full calendar year! Yet companies often revisit performance planning only on an annual basis. If that's the case where you are, it's time to make some changes.
The goals against which performance is measured should be revisited quarterly at the very least. The manager and employee should take stock of the business climate, how the goals fit the present needs, and tweak what does not fit. And they should be spending at least as much time looking forward in time for goal planning as the do in looking back to assess past performance. What's going on with your most critical customers? How about your competition? What needs might be coming that your department didn't anticipate or plan for previously? In other words, are the performance goals set at the beginning of the first quarter still relevant at the end of the second quarter? This is where true Performance Management comes in. Suppose you have noticed that one person in your department has become sort of the resident expert in the use of project planning software. He's so good at it that others come to him for assistance. And your department has become quite dependent on his skill and his willingness to share it. Project work is actually running much more smoothly, and dates are regularly met. Your customers are happy, too. Your boss has noticed and now wants a monthly project management update, complete with the slides and reports this software can generate. Do you see the issue? It's easy to let someone who's good at a particular task sort of own that task. But it's not smart. If this is an effective tool for the whole department, make sure the whole department can use it effectively.
Another factor to consider is the personal situation of employees which could lead to attrition. Let's suppose you have 12 direct and indirect reports in your department. Look at each person in regards to the following variables:
- Family Situation: Do they have a junior in high school who they probably don't want to move any time soon? Do they have aging parents in the area? Or have they become empty-nesters recently?
- Spouse Career: Has this person's spouse gone back to graduate school in a program in your city? Or could he or she have just completed such a program? Is the spouse's company experiencing lay-offs?
- Career Aspirations: Are you considering an employee who is within 3 years of retirement? How about a person for whom there really is no clear career path, or someone who really does seem unhappy in the job?
- What's the local job market like? Are there employees who you know would not want to leave the area, but who might be open to joining a company which has just moved into town?
What you are trying to do, of course, is develop some awareness of what factors could trigger employees to leave your company. While you can't prevent the attrition, you can have in mind which positions might be vulnerable and consciously work towards creating back-ups for those people. What's great about this approach is that you develop some real flexibility in your organization, you have fresh eyes looking at ongoing issues, and you give people the sense that you are investing in their growth and development---which of course, you are.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.