Nov 02 2021| Leadership | leaders
by Phil Eyre Leaders' Founder
Fostering excellent leadership that in turn creates sustainable, healthy workplaces is at the heart of our mission. We explored this with our Leadership Development cohort, a group of leaders drawn from very different organisations ranging from professional services to architectural practices. The group identified these symptoms of a sick company, how many of these do you recognise?
Excessive employee turnover is often associated with corporate sickness. What constitutes ‘excess’ is situational and will depend on the nature of the company, the time of life of the company (e.g. start up or mature) and the particular challenges faced. Some employee attrition is healthy: people retire, some need to move on, growth requires change.
We usually view much over 20% per annum as ‘excessive’; 35% and over can be fatal, especially if undesired and uncontrolled by management. At these levels, the costs are disruptive, let alone the damage to reputation which in turn makes rebuilding the team difficult - sometimes impossible - to achieve. High attrition can become self-fulfilling as team members become unsettled and competitors sense opportunity.
There is a further factor that our cohort identified. It’s not simply the rate of attribution; it’s the quality of the people leaving that is a stronger signal of sickness. Good people tend to leave first. They are unwilling to tolerate an unhealthy environment and are more able to move because they’re ‘good’! Relatively low attrition rates can therefore be a signal of distress if the people leaving are talented and pivotal to the company.
Excellent leaders attend quickly to employee attrition. They take careful note of the reasons why people are leaving and the impact on the team, as well as considering ways to build back strongly. They don’t dismiss the problem, denying that there is an issue, and they don’t take initial reasons for employee departure at face value. They look more deeply and seek to understand the root cause. This takes time and a sophisticated approach in order to get to the truth.
To read about the second symptom of a sick company, click here.