With layoffs dominating the headlines it seems hard to imagine a time when one of the biggest problems facing senior executives will be retaining and replacing key talent. But the resume tsunami is already building.
In a Forbes Insights global survey of senior executives 65% reported they were “highly” or “very highly” concerned that high-potential talent and leadership would leave once the economy turns and 52% predicted an increase in voluntary turnover at their companies once the recession ends, four times the number expecting a decrease.
Did you know that replacing an employee costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees?
If a company loses just ten supervisors a year, it is reasonable to compute the bottom line replacement cost at $500,000. The top line cost? If the company’s profit margin is 10%, then it costs $5,000,000 in revenues to replace these ten supervisors.
I don’t know any CEO who wants to lose $5.0 million in revenue.
Leaders that adopt my advice reduce the risk of turnover and loss of institutional knowledge. When leaders transform themselves they in turn transform the people around them.