Professional Liability Insurance Group May 2018

Professional Liability Insurance Group May 2018

The PLIG Professional’s PULSE

Volume #23

The 1 Relationship You Never Want to Take for Granted Your Clients Need Your Employees

When you have high employee turnover, chances are you have higher- than-average client turnover.This is a detail that too many companies overlook. If your business is client-facing, your employees must build relationships with customers, and these relationships are key to retaining your clients’ patronage. When a client-facing employee leaves your company, your clients have to start over and build a relationship with someone new. Not every client will be willing to do that.Their sense of loyalty has been worn down, and it gives the client the perfect opportunity to look elsewhere for similar products or services. And, as we all know, when clients leave, your business suffers.That’s lost revenue. But, by that same notion, your business also suffers when employees leave.Your employees are important for keeping those revenue streams flowing. While employee retention is not the sole factor in client retention, it does influence it, so examining your staff turnover rate is always a good idea. The costs associated with replacing an employee are high.You have to find the right candidate and train them. Couple that cost with losing a client, and your business suffers a significant amount. According to a 2015 ERE Media study, replacing an entry-level employee costs about 30–50 percent of that employee’s annual salary. Need to replace a mid-level employee? It costs about 150 percent of their annual salary. Get to senior or highly specialized employees and the cost reaches about 400 percent of their annual salary. On the customer side of things, a Bain & Company study found that it is 5–25 percent more expensive to get a new customer than it is to retain a current customer. Considering all of these costs, why wouldn’t you do everything you could to retain good employees? Employee retention is critical for morale.When you lose one employee, it’s not uncommon for others to follow or begin to consider a move elsewhere. Of course, it’s also critical to understand why employees decide to leave.

This is where in-depth exit interviews can provide valuable >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6

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