The US is currently experiencing an unprecedented number of executive level employees choosing to either change jobs or retire earlier than anticipated.
A recent study reports that more than 70% of business owners and CEOs are currently experiencing and projecting significant staffing shortages, and expect even more severe work and performance depletions within the next few years.
The reasons for this trend are many, but for today’s topic we will be focusing on ways to mitigate those changes and most importantly, how to inoculate your organization against the negative impact from those unanticipated resignations.
The Great Resignation
The current and post-pandemic eras have unraveled the Great Resignation period, particularly in white-collar job sectors. Departing C-suite executives and other senior leaders have put increased pressure on front-line managers, who are already dealing with extraordinary demands. Increased workloads, imbalanced reporting systems, lack of staff and rapidly changing health protocols are just a few of the things that have made the past few years challenging at best.
As a result, leaders from managers all the way up to C-level are demanding more for their services. Requests for increased compensation and work-from-home options are the two biggest changes we have seen. Top talent is also looking for roles that offer personal fulfillment, better pay, time off for holidays and special occasions, flexible work schedules as well as other benefits.
Negative Consequences of Executive Attrition
Turnover at the top creates a ripple effect that is also a leading cause of decreased employee performance. It can negatively impact organizational discipline, employee satisfaction, and retention ratios. Executive-level turnover often results in resource depletion, potential disruption in the organization’s performance, and lost or at the very least lowered tactical and strategic knowledge distribution among lower-level managers.
The challenge is that it is difficult to have all important data compiled in an organized, easily accessible fashion, so there is always going to be some degree of loss when a senior member leaves the team.
Losing a key executive results in multiple issues, not the least of which is the very real issue of rumors centered around the stability of the organization for new as well as well-established companies, as well as everything from additional attrition, lost accounts, lowered morale, and reduced stock prices.
While no one has a crystal ball, it is a fair bet that all companies will experience increased levels of retention and attrition issues in the near term, so there is no reason that anyone should be caught flat-footed.
The Single Biggest Loss
Arguably the biggest loss when a long-term employee leaves is the loss of institutional knowledge because regardless of who you find, you cannot replace it.
What is institutional knowledge? Institutional knowledge is the combination of experiences, processes, data, expertise, values, and information possessed by company employees. It can span decades and is comprised of crucial trends, projects, & perspectives that define a company’s history.
Every company has a story, very similar to a family. There is a shared history amongst early members as well as a treasure trove of information that would be impossible to replicate.
This is why every effort should be made to formalize documentation on an ongoing basis regarding specific information that would be difficult to retrieve in the event of a separation.
The Hidden Opportunity
While no one likes surprises, having a heads up that there is a very real possibility that you will be faced with an unexpected resignation at some point down the line is powerful information.
Being prepared with an action plan in place is the very best inoculation that you can have to mitigate the negative side effects of having senior leadership leave.
Take this opportunity to top-grade your team. Take a strong look at your current team, paying close attention to their strengths and weaknesses. Create a list of the most important qualities the replacement should bring to the table and be strategic in hiring.
Timing matters…The quicker you can hire a replacement the better, signaling that you were not caught flat-footed and are not going to miss a beat, actively moving forward in a positive direction. Obviously, you are not going to make a rash decision and will make the very best hire possible, but this is a situation where an efficient recruiting process and clear-cut interview process with decision-makers ready to pull the trigger will be of paramount importance.
Have an action plan in place by building a relationship with an executive recruiter BEFORE you need one. Take the time to vet out various recruiters, looking at their tenure and track record. This will take time and it is far better to do this now, prior to when you have just been handed a resignation.
Promptly providing a replacement will infuse new energy into the team which will give the troops someone to focus on, rather than pontificating on the reasons why the incumbent jumped ship.
By expeditiously backfilling a role, this also provides the suggestion that perhaps the departure was mutual and a backfill/upgrade had already been identified.
By expeditiously bringing on star performers you can spin the situation into a positive one, and the impression will be one of top-grading your team.
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