We are beginning to see counter-offers and bidding wars for top level talent. If you have to counter in order to keep an employee, you might save yourself the cost and frustration by taking care of them now before they want to leave. My experience has proven that a counter offer is just a short-term fix. A loyal and committed employer would serve themselves well to evaluate their company’s risk of losing key personnel who are critical to the success of day to day business and growth. Direct turnover costs per employee are about 25%-30% of an individual employee’s salary/benefits package, according to market research firm InsightLink Communications.

We interview candidates every day and see a broad range of experience and talent. I thought it might be helpful to get another perspective of why people leave a job.

Some of the more common reasons people share with us regarding why they are looking to leave are: broken promises, loss of business, change in management, no growth in role, role has changed, money, benefits, commute, staff conflict, merger/acquisition, review/raise. Almost all of these can be remedied or addressed before people leave.

Broken Promises- Whether real or in a person’s own mind, a broken promise is hard to overcome. It could be as simple as a dedicated parking space or a review that never happens. Once the trust is gone, you have an uphill battle.

Loss of business- Business comes and goes. Unfortunately, the people who support that business do as well.

Change in management- Employees don’t like breaking in a new boss. It is always uncomfortable and creates a shuffling of roles and relationships. No one wants to be the odd man out.

No Growth in Role- Driven employees have a full agenda of what they are trying to accomplish in their career. If the advancement in their career at your firm is not to the level they expect, they will jump to find it elsewhere.

Role has changed- Change is not always perceived as good. A person who is a routine style employee will find any alteration in their work rhythm as painful.

Money- Competitive pay for services rendered is an expectation. An employee may take less when the market is down for survival, but once it improves they will be gone if they are not given a fair increase. Also, there is an unspoken expectation that a person’s salary increases with years of service. It could be in promotion, performance or a cost of living increase. Money is the most sacred of areas protected by an employee.

Benefits- This concern is most important to individuals with families to support or people who might have a pre-existing condition. They need cost-effective and comprehensive options that are broad and affordable. A job with little to no health benefits is a high turnover risk.

Commute- People prefer to work, as a general rule, within a 30 minute commute from their home. Our candidates are reluctant to consider jobs more than an hour commute.

Staff conflict- People do not want to work in an environment where there is personality or personal conflict.

Merger/Acquisition- When two companies combine there is often a redundancy of staff. Reducing the additional people helps control costs and improves productivity. It can be perceived as the perfect time for people who are afraid that they might be on the chopping block to jump ship. Good people who are fearful may jump too soon.

Review/Raise- This is the most common reason I hear from people for leaving a job. It could be because they haven’t had a review and don’t feel valued or that they don’t agree with the reviewer’s opinion of them, or lack of a pay adjustment.

Total Score 50-60 You have a work environment where staff grow and are loyal.

35-49 Your firm is considered stable and provides most of the things an employee seeks

25-34 You have and environment that is not for everyone.

0-24 Your firm is at a high risk of losing key staff for better opportunities

This assessment is not a scientific tool. It is based on social feedback and the opinions of staff and recruiters compiling this data.

I’ve just returned from a managers meeting at our corporate HQ. While there, we covered lots of the topics expected - sales, management, hiring, best practices, how to grow and mentor a team etc.  But one of the most surprising topics covered was - vacations.

I am one of those managers who is guilty of putting off  vacation time until the end of the year and then not being able to use it.  l do like folks that put in tons of hours and are fully engaged in their roles at work.  But also I have also seen the effects of burn-out. I have learned over time - that taking time off is, in fact, an important element in keeping employees performing at their best.  So I thought I would share the research finding I received from our communications team.

Time Off

If you’ve been handing out an unspoken pat on the back to employees that work more than 40 hours each week and rarely take vacation, you’re likely not alone. According to the American Workplace Insights survey conducted by Harris Interactive:

• 57% of employees do not expect their employer to encourage vacation use.
• 58% believe their employers likely won’t offer flexible work hours this year.

It’s time to rethink your strategy. All work and no play may or may not lead to dull employees, but it will directly and negatively impact your bottom line. The following are a list of eight reasons to encourage your employees’ regular use of paid vacation:

1. Put a cap on accrued vacation payables. When an employee’s unused vacation time is allowed to accrue for an extended period of time, employers are left holding the bag if that employee leaves the company or suddenly decides to take many weeks at one time. A “use-it-or-lose-it” policy encourages employees to use their earned vacation time within the calendar year, and protects your balance sheet from an unlimited or unexpected payout.
2. Rested workers result in reduced premiums. The hallmarks of workaholism include fatigue, poor health, and stress, all of which lead to an increase in worker’s compensation and health insurance costs. Keep your employees healthier and safer while minimizing the premiums you pay, by enforcing necessary breaks in engagement and regular time off.
3. Increase output with higher productivity and accuracy levels. Studies have shown that productive, successful employees are those who take vacation and occasional time off to relax, rejuvenate and refresh. Upon return from vacation, their renewed sense of drive and determination can provide both short-term and long-term boosts in productivity. Additionally, the necessary rest and replenishment will help them avoid costly mistakes, which overworked employees are more apt to make.
4. Employees that get away are more likely to stick around. When you consider the total cost of recruiting, hiring and training new employees, turnover expenses can be devastating. Help improve employee morale when you facilitate, and even encourage, employee retention through the use of vacation time and an environment that supports employee-centered work hours.
5. A change of scenery promotes ingenuity. Hum-drum routine rarely leads to inspired thinking. When on vacation, we often find ourselves in a new environment, and going through different routines. By being forced to behave and think differently for a period of time, we gain fresh perspective, creative inspiration, and new ideas. It is impossible to put a dollar value on the innovation and ingenuity that will result for your company when you encourage your employees to take vacation as a sabbatical.
6. Happy employees minimize risk and adversity. The ever-elusive office culture – you tout it to recruits, but do you really understand its value? Overworked employees are cranky employees, and are often the cause of infighting as well as office politics. They are more likely to berate their boss, resent coworkers that don’t work as hard as they do, and even resent the job itself. Your entire office, and its work product, suffers the effects of an overworked employee. You can prevent unnecessary crankiness on your team by simply making it clear that working long hours and foregoing vacation are not the way to get ahead.
7. Reduce unplanned outages. Overworked employees may take fewer vacation days off, but the tradeoff is that they likely will require more sick days. Additionally, if your employees are nervous about how you will react to their vacation request, they will be more likely to procrastinate – leaving little time for a back-up plan – or even play hooky. Conversely, employees who feel open to use their vacation time at their discretion will more proactively plan for their outages and have fewer sick days. Foster an environment that supports your employees’ efforts to balance work and their personal lives through paid time off, and the result will be loyal employees that won’t leave you hanging.
8. Detect and deter fraud by interrupting individual controls. According to the Association of Certified Fraud Examiners’ (ACFE) 2010 Report to the Nations, a typical organization will lose 5% of its annual revenue to occupational fraud and abuse. Fraudulent behavior often requires complete control over an activity by one or more persons to cover up the paper trail, and is difficult to maintain while out of the office for a week or more. In fact, refusal to take vacation was one of the key red flag behaviors identified by the ACFE in their study. While the reality of these statistics is unpleasant, companies must acknowledge the need for a required vacation policy to help detect, and ideally deter, any existing or potential fraudulent behavior.

You know that the time will come when the “employer market” will change back to a “candidate market”.  My friends, that day is fast approaching!  For those of us who went through this cycle in the 90s (yes, I was there), it was a great time for qualified talent to make a change but not so good for companies who had invested thousands of dollars and years into cultivating the talent.  Firms were often in bidding wars over candidates and many times there would be 2-3 offers up for consideration.  Sign on bonuses, relocation packages and stock options were commonplace, not the rare exception.

There are some basic steps you can take as an employer to solidify your relationship with your employee so you don’t find yourself looking for help when you didn’t see it coming.

1. Make sure your employee knows where they stand in your business.  Tell them how you feel about them.  Show them they matter in their pay, benefits and involvement in the decisions of the business.
2. Be flexible with things like time off, work hours and virtual work when possible. Today’s workplace has changed dramatically and employees are juggling much more in their schedules and the employers who offer the most flexibility will grab more of the top talent.
3. Don’t try to play the bidding game with an employee who is already looking on the outside.  If they matter to you, counter quickly and decisively if necessary but be willing to let them go their own way.  If their decision to leave is all about more money, the desire to get more will continue to be there.
4. Promote your best people and give them a clear career path that is set in your firm.  People who have been patiently waiting through the Recession for those long ago promises will not be so patient moving forward. 

As a candidate looking to make a change there are also key factors for you to keep in consideration.

1. Have your resume always up-to-date and references available.  Some jobs will appear out of the blue and you don’t want to keep a potential employer waiting.
2. Keep your social networks open and always looking for new potential matches.  Remember, other people will have the same idea as you.
3. Don’t just “kick the tires” to see what is out there.  While as a candidate you might have the upper hand, you can burn bridges and get a bad reputation with recruiters and clients that will spread like wildfire.

The bottom line is that things are improving and the market will be much more competitive for the top talent and keeping the people you already have in place.

Now is a good time to do some “soul searching” and make sure you haven’t capitalized too munch on the current market and irreparably strained the staff relationships that your business needs to continue to be successful.