Managers can be so busy at work sometimes that it’s almost inconceivable for them to think about anything beyond the present day or even hour. And, while many business leaders wisely set aside time to think about 1-year, 3-year, or 5-year plans, far too few spend time thinking about where their current workforces will be over that time period. But the simple fact is that turnover rates are surprisingly high, on average, in the United States.
According to the Bureau of Labor Statistics, the turnover rate across a wide range of industries in the private sector was over 47.4% annually in 2017, and that number has increased steadily from 42.3% in 2013.
While many companies spend time thinking about succession plans for senior executives, far too few do the same for entry-level or even mid-level employees.
At first, it might seem like such planning is unimportant, especially for entry-level employees. But here are a few reasons why companies should think about succession planning for all employees.
Even employees who have been on the job for just a few months have already gained some institutional knowledge that their replacements won’t have.
Simple things like company policies, how to identify resources, what approvals are needed for certain activities, etc., can make a big difference in terms of employee productivity.
When employees leave in the midst of ongoing projects, it can threaten productivity, quality, and even the overall outcome of the projects. This is particularly true with customer-facing projects.
Even when a departing employee gives 2 weeks of notice, it’s often difficult for someone new to step in and pick up where the departing employee left off.
Often, departing employees are replaced by someone already employed at the company, or the work is divided among multiple employees. But, presumably, those existing employees are already responsible for their own work, which must then also be reassigned. The alternative is hiring a replacement from outside of the organization, which can mean months spent onboarding and a certain loss of productivity.
With turnover in the private sector close to 50% annually, and growing year by year, it’s important for businesses to consider transitions when employees leave and need to be replaced.
We’ve discussed a few reasons why here. In a follow-up post, we’ll discuss how to prepare for employee turnover, and in an additional post, we’ll discuss how to actually execute the transition after employee separation.