The Challenge and Cost of Lost Expertise
As your organization continues to grow and the complexity of it increases because of adding more employees, it’s harder and harder for leaders to communicate, execute and ensure all employees feel valued. Personalized employee development becomes virtually impossible. You may not be able to interact with all employees the way you once could. This is why CEOs and executive leaders must stay on top of how managers of departments are aligning people and their performance to organizational goals. This is more difficult than you might imagine.
Then, there is the easy part of this equation. The easy part is for employees to become disengaged. This can be because they are not feeling valued and the grass begins to look greener someplace else. When you, as CEO, lose really good employees, whether they leave on their own or they are let go, it can cause disruption in services or product delivery. The high cost of losing key employees is not new; the cost of lost expertise can cause a large slowdown in how the organization responds to customers, produces products or competes in the marketplace.
Some of the associated costs to lost expertise can include:
Replacement, recruiting and administrative costs
Cost of onboarding and training new employees
Cost of severance packages
Cost of disengagement prior to leaving
Increased unemployment insurance costs
And many others.
Some critical questions you may want to ask yourself regarding lost expertise:
What is your current process of capturing intellectual capital?
Do most of your employees have a back-up person who can do their job in an emergency?
How do you identify current process and ensure they are followed?
How is collaboration encouraged and rewarded?
How are employees rewarded for innovation and new knowledge acquired?
Losing employees is disruptive to your company. It’s important that you are thinking about what would happen if each one of your employees would leave. This exercise is critical for you and your management team because it forces you to think proactively.
It’s critical that you are thinking about what would happen if each one of your employees would leave.
It’s also obvious there could be a financial hit if someone left. For instance, if critical process were not in place and customer deadlines were impacted, you may lose customers. You should consider the expertise of each employee and how you and the company would operate if you were to lose any of your current staff.
Another catalyst for this disengagement occurs when you hire people who come from well-defined cultures and well-defined processes and roles and perhaps yours are not so well defined. This goes against the grain of what they’ve been accustomed to and can be quite unsettling. This kind of situation needs to be addressed on the front end prior to a hiring agreement so the employee understand what to expect and what their role will be. This post commonly occurs in turn-arounds but can be in (supposedly) well-established companies as well.
The bottom line is that lost expertise in your organization can cost you dearly. Analyze and strategize on the best way to handle this employee development challenge and as always, we are here to help with guidance and ideas for you!
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