Love ‘Em or Lose ‘Em – Retaining Top Talent During the Economic Recovery

Love ‘Em or Lose ‘Em – Retaining Top Talent During the Economic Recovery

There seem to be two schools of thought regarding the global recovery. The first is that we’re on our way back to a stable economy, albeit one that may not be as “healthy” as it was prior to the recession, but at least it’s on an upswing. The second is that we’re currently in the eye of the storm headed into a second round of recession (known as the “double dip phenomenon”). Regardless of which side is more accurate (and perhaps neither is correct), there is one reality that holds true. In this time of potential recovery, law firms and corporations nationwide must focus on their retention strategies to ensure that their employees remain loyal and committed.

There was a time when most lawyers spent 30 years at one firm and turnover was mostly due to retirement, but those days are gone. A survey conducted by the National Association of Law Placement says that 37 percent of associates leave large firms within the first three years and 77 percent depart within the first five years. Generally speaking, the cost of replacing a current employee with a new hire is much more than the cost of retaining an existing employee. Not just the actual financial costs related to hiring and training, but also what are considered the “soft” costs connected to firm morale and the possibility of an unhappy client who foresees a setback when their firm contact is suddenly gone.

If you don’t have a retention strategy in place, it’s time to start planning. Often, retention strategies arise from a situation in which there is an exodus of staff members and everyone is in panic mode trying to retain whoever remains. However, because that retention strategy is born from fear, it misses the mark and doesn’t really accomplish the intended goal.

Retention strategy: Things to consider

Turnover
There is a difference between positive and negative turnover. Positive turnover is when low performers leave on their own (and preferably go to a competitor); negative turnover is when top performers leave (or worse – go to a competitor). Of course, it is best to minimize negative turnover and maximize positive turnover.

Technology
If your firm has it, take advantage of it. Most technologies make it possible for employees to work from home, thus allowing firms to offer flex time options to enhance compensation packages for employees.

Culture
Recognize that there are generational differences among your staff. Your retention strategy must address the motivations of multiple generations in order to retain all staff. As a firm, be aware of the mental health of your staff. Are they burning out from being overworked? Are your current staff members doing the jobs of multiple people due to layoffs? Remember that although we’re all in business to make money, most of us still want to have fun doing it. Even those who are employed at the more traditional firms want to enjoy their jobs and look forward to coming to work every day. Motivation is a huge part of retention and cannot be overlooked.

Compensation
There’s a fairly good chance that your current employees may have had to endure pay cuts, removal of well-loved perks, layoffs, etc. It’s time to say thank you for staying through it all. If possible, reinstate pay rates even if you can’t restore them back to 100%. Make every effort to re-establish any perks that may have been taken away or bring back any bonus and incentive programs that may have been suspended.

Be aware that the tendency throughout the recession and the beginning stages of the recovery was to offer lower hiring salaries than what was typically “market rate.” Firms were watching their bottom line much more closely than usual and were hesitant to commit to large dollar salaries. In addition, unemployed candidates were acting out of desperation and were much more flexible with what they were willing to accept. Many candidates accepted positions at salary levels far below what they were previously making and now seek to get back to the salary levels at which they know they should be earning. As the economy stabilizes, firms will no longer get to call the shots when it comes to salary. Job applicants are counter-offering the low salary offers and standing firm with what they’re looking for and what they feel they are worth, regardless of recovery or recession.

Bottom line: Give your employees a reason to stay.
More and more candidates are entering the job market, proving that this is the time to show your employees how much you value them and appreciate their commitment to you during what were some very difficult times.

It is becoming increasingly apparent to many just how important retention actually is. Many firms are opening positions for Directors of Development; positions created solely to focus on retention and attrition. These individuals are tasked with designing and implementing a plan to inspire, excite, energize, stimulate, encourage and support all current staff members in order to create an environment where the employees are motivated to give 100% and are fully committed to the common goals of the firm. Who wouldn’t want to stay with a firm or corporation that makes those things priority #1?

Nikki Kelly is Area Vice President for Special Counsel’s Southern California and Phoenix offices.

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