Employee engagement and high morale is the backbone of strong organizational performance and, as the year comes to a close and companies look ahead to 2008, one industry report
highlights a major management conundrum: PR agency staff turnover.
The report, released in November 2007 by merger and management consultancy StevensGouldPincus, is based on 150 firms, all of which were posed the question, "What percent of
staff total was your turnover during the past 12 months?" The calculation model was then defined as the number of staff that left the firm divided by the total staff level at the
start of the 12-month period.
The results, as evidenced by the chart below, indicate an average turnover of 20.5%, with the highest percentage (24%) among those firms whose revenue is greater than $25
million annually. In terms of turnover based on specialty, the following sectors saw the greatest averages:
-
Real estate (27.2%);
-
Public affairs (23.4%);
-
Economic development (22.3%);
-
Crisis (21.7%); and,
-
Professional services (21.2%).
Given the current credit crisis, it's no surprise that real estate saw the highest turnover among agency specialties. However, of greater importance for communications
professionals, the report questioned CEOs, among them Fred Bateman of The Bateman Group and Michele McCormick of MMCPR, on staff turnover's implications on business.
"Attracting and retaining quality employees has been a top priority for years," McCormick said. "Some losses are unavoidable - people get married, their spouses get
transferred, and etc. I consider it urgent to avoid the loss of key employees."
Of course, turnover is a problem for more than just public relations agencies; a troubled economy naturally precipitates an unstable workforce, but retention problems are far
more costly than the initial headache of finding a replacement. In fact, multiple studies show that staff turnover is a very expensive proposition.
Costs due to a person leaving include loss of productivity; HR costs related to exit interviews, etc.; training existing employees to compensate for the temporary gap;
potential loss of customers; impact of departmental reactions to the departure; and, in some cases, costs relative to benefits continuation and unemployment insurance
premiums.
Of course, these costs don't even begin to include those incurred by recruiting new employees to fill a void. Advertisements, recruiters, training, administration and lost time
are expensive pieces of the puzzle. In fact, one consulting firm estimated that replacing an employee whose salary was $50,000 would cost upwards of $75,000 - a bitter pill to
swallow when turnover is often avoidable.
For more strategies and best practices on building your best team in 2008 -
and keeping them happy at your organization, see "A New Year's Resolution of
Quality Control: Building Your Best Team for 2008" on page one of this week's
issue of PR News. PRN
| STAFF TURNOVER BY AGENCY SIZE | ||||||||
|---|---|---|---|---|---|---|---|---|
| REVENUES | # OF FIRMS | TURNOVER % AVERAGE | TURNOVER UNDER 10% | TURNOVER OVER 30% | TURNOVER OVER 30% | |||
| # of Firms | % of Firms | # of Firms | % of Firms | # of Firms | % of Firms | |||
| A. Less Than $3M |
84
|
19.20%
|
28
|
33.30%
|
36
|
42.80%
|
20
|
23.80%
|
| B. > $3M to $10M |
42
|
22.20%
|
8
|
19.00%
|
22
|
52.40%
|
12
|
28.60%
|
| C. > $10M to $25M |
18
|
21.30%
|
3
|
16.70%
|
12
|
66.70%
|
3
|
16.70%
|
| D. > $25M |
6
|
24.00%
|
2
|
33.30%
|
3
|
50.00%
|
1
|
16.70%
|
| ALL FIRMS |
150
|
20.50%
|
41
|
27.20%
|
73
|
48.80%
|
36
|
24.00%
|
Source: StevenGouldPincus