Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Practice Management > Building Your Business

High Turnover Creates Poor Performance

Your article was successfully shared with the contacts you provided.

Before you send me hate mail or love letters, please understand the following is not political commentary. I use this public example as a real-time illustration of workplace dysfunction.

I doubt this article will alter your view of which politicians bring you joy or infuse you with anger. However, if this example inflames your emotions, please channel your energy into thinking about how similar conditions could happen in your business and how to avoid them.

My inspiration for this month’s column comes from recent reports that the White House has experienced a 34% turnover of staff within the first year of the current administration. By any standard, that is a lot. Of 12 leadership positions deemed most critical to the president, only five remain filled by the same person as when this administration came into office just over a year ago.

Several key roles have turned over at least twice, and another key position has turned over three times. Some people left after background checks showed they did not qualify for permanent security clearance or because of pending charges from law enforcement.

Others left because they lost the confidence of their boss, they could not manage the stress of the job or they disagreed with the words and actions of their leaders. Advisory firms with high turnover often suffer similar circumstances — with compliance blemishes or personal financial issues replacing security clearance as a reason for departure.

When people leave your organization under a cloud, the damage can be long lasting. In the example of our government, these conditions contribute to voter cynicism and distrust of our elected leaders — which impedes their ability to govern. In business, the damage is measured in monetary and reputational terms, because employees, clients and investors become wary of starting new relationships with an unstable firm.

I do not have any special insight into how this administration hires, develops and manages people. As a result, it is hard to know which actions are justified by either the employer or employee. I also admit that staffing to support an elected leader brings a different dynamic than what exists in business, especially because money is not usually the immediate inducement to accepting a political appointment.

Nonetheless, public examples like this often lead to private lessons, including how to run your business. Your mission, should you choose to accept it, is to apply the lessons learned — without bias for or against the people involved. Here is my question: If this were your organization with this type of fact pattern, how would you address the problem of high turnover?

What to Do

There are three key factors in thinking about staffing. First, define the nature of the work. Clear job descriptions, including a definition of success in the role, develop a clearer picture of the type of individual who will perform well in that job.

They also create a framework for training and for performance evaluations. This job clarity helps leaders avoid relying solely on education, work history and professional credentials as the hiring criteria.

Do you have a definition of excellence for each position in your firm? Do you even know what the job descriptions say? Do your employees know what they say? Are you evaluating people according to the job description? An honest assessment of how you conduct your hiring and reviews in light of the job expectations can make a huge difference in how you manage involuntary turnover.

The second step in evaluating your staffing practices is to define the nature of the worker. It is critical to match the right person to the job we expect her to perform.

For example, if the position requires repetitive processes every day, it is not a good idea to put a multi-tasker in that role except as a teaching moment. Almost anyone can do boring tasks for a short, concentrated period of time, but if the individual is not properly suited to the work eventually he or she will burnout.

Your personal experiences can help put this in perspective. Have you ever had a job that you absolutely hated? Were you qualified to do that job? Did it stimulate you or bore you? Did it hold your attention or frustrate you because it demanded a skill set you did not have? Did you have the right temperament for the position?

A former mentor who helped me to become a better manager once advised me to “hire slow, fire fast.” He pointed out that I was emphasizing education and experience too much; character and potential too little.

He helped me to understand that there is a linear process to attracting and retaining the right talent. This process transcends our natural biases about who would be great for the business and who would not.

The third step is to define the nature of the workplace. Clearly, in high-pressure environments like the White House, one must be alert to the rapid pace, the constant public criticism and the tension between permanent bureaucrats and temporary officials.

Advisory firms also experience great stress from volatile markets, demanding clients, deadlines and overwork. Leaders must minimize these distractions so their employees can focus on performing well. Departing employees may claim it’s about the money — but oftentimes they are frustrated by the environment and more pay would not convince them to stay.

The Right Climate

A positive work environment is basic hygiene. Your colleagues need to be treated with respect, never underestimated and given the opportunity to progress. Abuse, harassment, backstabbing and triangulating all contribute to negative workplaces.

This behavior must be eradicated no matter the “special gifts” that the perpetrator may have. Few things annoy employees more than when leaders try to justify keeping disruptive individuals merely because they do other parts of their job well.

One of the key elements in creating a dynamic workplace is to abide by a statement of cultural values. As an example, when I was a principal in the accounting and consulting firm Moss Adams, we evaluated our employees, our peers and our bosses according to PILLAR, an acronym for passion for excellence, integrity, lifelong learning, leading by example, accountability and respect. Even our CEO was held to this standard; and for those who aspired to become partners, their failure to live up to these values was often the basis of denial.

When done right, the three steps — defining the nature of the work, the worker and the workplace — help to minimize turnover, attract talented people and create a sustainable, vibrant enterprise.

By observing individuals in positions of power and influence, we may glean valuable lessons. These insights help us to examine our own leadership style. Who we hire, how we inspire and how we drive results determine whether we are creating a dynamic workplace. When employees and leaders value the same key factors, the firm comes full circle to a shared culture in which all members thrive.

Mark Tibergien is CEO of BNY Mellon’s Pershing Advisor Solutions. Tibergien is also the author most recently of “The Enduring Advisory Firm,” written with Kim Dellarocca of Pershing and published by Wiley. He can be reached at [email protected].


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.