The Ultimate Cost of Not Able to Retain Your Good Employees

The need to retain your good staff is so important that many business owners fail to realize how it will impact their business growth. What will happen when one of your good employees moves to another company due to various reasons?

The after-effect of your good employee leaving:

1)      Existing Client Exodus – Many clients who are very close with your employee will probably be moving away from your company to continue to use the same person, regardless of which company he or she goes to. (Assuming that he or she stays in the same industry) Please do not tell me about any contract clauses saying that the ex-staff cannot service the old clients, because in this free society, a client can freely choose any vendor he prefers.

2)      Opportunities Lost – Even though the clients may still stay with the company, the next person taking over will need time and resources to build a rapport with the existing clients, and there is a possibility that the new staff may not be able to build the same rapport with the existing clients. Hence, this group of clients may also potentially be gone after some time.

3)      Training Cost – With new staff coming in, there will be a need for orientation and training. Such kinds of resources will involve time and money. Of course, this cost will always be at the expense of the company. During the training and orientation, the potential sales of the existing client will be almost ZERO; with that, the overall loss is quite significant and damaging.

4)      A Dip In the Team Morale – In the event your good employee leaves, those people who were close to them will feel the stress and heat and two questions will come to their mind: Why didn’t the company ask him or her to stay? Why did the staff leave—is there potentially any problem with the company? The fellow colleagues will NEVER ask whether the staff who is leaving has any problem because they TRUST him 100%; hence, it automatically narrows down to the question that something could be wrong with the company and the question is—WHAT IS WRONG WITH THE COMPANY? With that, trust level will go down, and that could lead to a few more people leaving the company in the time to come.

5)      Hiring Cost- To hire new staff, there will be some cost involved; even posting a free advertisement on the Internet will still involve time, and filtering, interviewing, and selecting will still require more time. This will cost plenty of man hours lost. Let’s say that the position is a higher management position. Finding a replacement will take even more time, effort, and money because generally, it is tougher to find highly qualified people for higher positions.

6)      Lowering of Internal Branding – This may not be very obvious, but when someone leaves a company, especially a good employee, many people will feel uncertain about what happened unless the management is able to share the reasons with the existing staff.  However, the problem is that such explaining may not be effective if the trust level between the staff and the management is not high. It could backfire if it is not handled properly. As such, people who are loyal to the company could be shaken if good employees leave, and hence, the overall internal branding will be lowered without the management knowing what really happened.

7)      Loss of Revenue – If your employees are directly involved in the revenue of the company, there will be a potential loss of revenue, as existing clients may not be very keen to entertain the replacement. At least 50% of the revenue this employee previously handled could be lost!

Hence, if you have a good employee that you know that could potentially leave the company, you will have to find ways and means to make him to stay at all costs. I will touch base on how to retain good staff in another article.

Good luck, and be good to your great staff!