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June 25, 2021 at 02:46 PM
What You Need to Know
- The estimated financial cost of turnover can range anywhere from one to three times a departing team member’s compensation.
- If the list of responsibilities is more than a page long, it’s time to break the job up into multiple roles.
- Firms must be clear on what they are hiring for; the default is a catch-all candidate for a catch-all position.
Virtually every firm owner has experienced the challenging financial and non-financial impacts of staff turnover.
The estimated financial cost, depending on the source, can range anywhere from one to three times a departing team member’s compensation. However, this is not the most detrimental cost though. Even worse is the psychological impact of frequent turnover and how it causes the existing team members to lose confidence in their leader(s), increases the difficulty to recruit good new talent (due to perceived impaired culture and employee-unfriendly reputation) and can lead to an overall downward spiral of morale.
Most turnover stems from these four actions: 1) unclear role and responsibility, 2) insufficient screening for skill and cultural fit, 3) lack of clear expectations, and 4) poor overall management/mentoring.
Indeed, unclear roles and responsibilities can set up a new hire for failure before they even start.
The typical approach to establish the expected roles and responsibilities of a new team member is creating a job description, where the workload is determined by having each current team member submit a list of things they do not want to do or otherwise wish to handoff, now or in the future. This list gets compiled, and then someone is hired to do all of those things.
The problem with this approach is at best it may not mean a particularly exciting position, and at worst, it may mean one that is overwhelming and much more than a new hire can effectively manage. Instinctively, firm owners may know a position is more than one person can do, but they plunge ahead regardless to keep human capital costs low.
Suggestion: If the list of responsibilities is more than a page long, it’s time to break it up into multiple roles.
Because of the uncertainty in how to create a clear and compelling job description, some firms swing to the opposite extreme and adopt a “we’ll-create-it-as-we-go” route. But in tight talent markets, hiring the right fit is daunting enough when clarity around the role and responsibilities exists, and it is simply impossible to attract and screen the right candidates in a competitive job environment for a position that is not clearly defined.
