(Or, as my partner calls it, “Making It Sticky”)
Not too long ago, I received an e-mail from the Managing Partner at one of our clients, a mid-size law firm in Arizona. You can tell he was a bit frustrated by “the millennial” issue:
These kids want, are offered and get more money, more PTO but fail to stay anyway. They move on and want to see what else is in store for them. Maybe it is our failing but I am at a loss to see how you can make a relationship “sticky”. I can’t believe we are that bad but if we keep throwing more things like flex schedules, philanthropy, training, recognition and they still leave because THAT IS WHAT THEY DO we have two choices.
Change the entire way we do business and never give them institutional knowledge that will walk out in two years and will be costly to replace or just settle on making less money. These kids will then find that they have no companies to go to because they will all lose money and fade away.
I want to try to understand but I will not concede that I work for them!
Here’s my response (both his e-mail and my response received his permission to be published).
First off, no one is suggesting that owners work for employees. You don’t need to make that concession! Your employees are keenly aware they work for you. You may not see that respect and fear every day, but I do. It’s the reason many employees – including partners – choose not to publicly disagree with decisions made at your firm; it’s not worth the fight and – in the end – they know who the boss is.
Secondly, I’d dispute your second paragraph; I think there’s middle ground between changing your entire company or settle on making less money. That middle ground is elusive, but critical. I would think identifying that middle ground is the single most important thing to taking your firm to “the next level”. And it all has to do with leadership and paying more attention to the way you manage and lead your workforce. Over the past 30+ years, you’ve taken your firm to where it is; the challenge is getting to the next step.
Hiring the “Right” person
It all starts with sourcing, interviewing and hiring the “right” person for you. In my humble opinion, this is the area where you need the biggest improvement.
We’ve seen all the stats, and last year we came up with a figure that it costs you about $25,000 each time an employee leaves your firm. The single biggest differentiator of your firm and everyone else is your employees. Think about the number of employees who have left in the past few years that we decided “it was just as well they left”. According to my records, for every employee you were sad to see leave, there are twice as many that you were happy to see go!
A rough estimate of your turnover costs this year is about $600,000. (11 people lost @ $25,000 each; plus my estimates for recruiting fees for two associates, and recruiting fees for their replacement; and a buyout of a partner.
Mel Kleiman is one of the gurus of recruiting, interviewing and hiring in the United States. Here’s a couple from his list of “How To Hire The Wrong Person Every Time”. How many of these apply to you?
- You only recruit when have an immediate need, so you don’t have a list of pre-screened candidates to call. Now you’re in “desperation hiring mode” – pressured to hire the first warm body that walks in the door.
- You haven’t identified the particular Capacities (mental and physical), Attitudes, Personality traits, and Skills (also known as CAPS) needed to be successful on the job at each level. (You can’t hit the target unless you know what it looks like.)
- You don’t ask your employees, vendors, business networks, family, and friends if they know of anyone who would be a good fit for the job. (Referrals are the No. 1 best source of new employees.)
- During interviews, you rely on gut instinct so, naturally, if you “like” an applicant, you look for reasons to hire them and, if you don’t “like” them, you look for reasons not to hire them. This way you get to be right (but you also often hire the wrong person for the job.)
- You don’t plan for the interview. You just wing it and the inevitable result is that you hire the person with the best presentation skills rather than the person who is the best fit for the job.
- You don’t check references because you just assume that none of these people will tell you anything useful.
So with the cost of turnover negatively impacting your firm, the inconsistency of hiring and its probable impact on your customers, who’s in charge of the hiring process? Two managers who have virtually no leadership experience and, until last year, had never interviewed a job candidate before.
You hiring only for ability – or trying to – and hoping the other attributes – attitude, aptitude, agility, alignment – will come along organically. I encourage employers to hire for the last four first – then train for skills. Recognizing that some positions require detailed and unique skills – I would still submit the question: How much would it cost to train a really promising employee to do the highly technical stuff? And would that be less expensive than the revolving door in the that particular office?
I want to be clear: this is not just you, this challenge is everywhere. In business today, there are new demands for productivity, innovation and talent. This complexity demands solutions.
In the American workforce – in all industries – there is a significant lack of qualified talent. Everyone – including your competitors – is out to get them. We need to start systemically developing an acquisition process from recruiting to onboarding – led by a “Hiring Partner”.
We always talk about game changers needed at your firm. How many game changers have you hired in the past 5 years?
Why should great employees come to work (or stay) with your law firm?
Who do you want to be? What characteristics are important to you? My first attribute, based on 5 years of working with you, is “Our culture is one of true collaboration. If you’re a top-to-bottom team player, you can play on our team.”
When things work well at your firm, I see collaboration and communication. People who are true team players tend to get recognition and promotion at your firm. There may be more talented people, but at your core, you value collaboration. Sometimes it’s not always intentional, but it’s always there.
On the other hand, there have been several talented people who did not succeed at the firm because – legitimately or not – they were perceived as not being team players and only out for themselves, or a narrow interest. In my business, people like this are called “Talented Terrors” or “Brilliant Jerks”. These people are quickly excised from the best companies. Some companies tolerate them; for the great companies – the cost to teamwork is too high.
What is your goal when giving raises, bonuses, perks?
You can taste the frustration in your writing when you say: “…if we keep throwing more things like flex schedules, philanthropy, training, recognition and they still leave because THAT IS WHAT THEY DO…”
Then why do you do it? What is your goal? Is it to increase retention, hire better employees, increase productivity or teamwork? Is it to get better billable hours? Why are you doing this? Are we that scared of people leaving?
I’ve said this before to the partners and I’ll say it again: You cannot give anybody anything without asking for something in return. You give adequate compensation, generous bonuses, good perks, AND YOU DON’T ASK FOR ANYTHING IN RETURN!!!
Your firm – and I believe this to be a leadership issue from the partners on down – need to raise the bar. You have higher expectations and you’re willing to generously reward people who meet or exceed those expectations. But instead, we’re giving bonuses and perks to mediocre employees. We’re not demanding excellence.
I also think this is a culture issue and a needed culture/leadership change at the firm. Who are your non-partner stars? They’re the ones that need to be recognized and compensated.
Those high potential employees are the ones you should be singling out! What keeps them here? What would cause them to go? Let’s act on that! Some things we can do that might keep them; others would be out of our hands. But that needs to be a partner focus.
I’d be remiss if I omitted some people who are not high-potential employees but nonetheless highly valuable to your organization. They don’t seek or get a lot of love, but day in and out, they show up every day, work hard, and contribute to the maximum of their ability with a minimum of fuss. I’d give a lot to have a team full of people like that.
So my strategic suggestion for how to make it “sticky”? Raise your expectations, HOLD PEOPLE ACCOUNTABLE, live and execute your values and culture (once you’ve identified your values and culture). Create a culture where you both expect and reward excellence.
Secondly, let’s take a look at the ‘big picture’ when it comes to perks. There’s a responsibility and obligation required of those who get these perks, and we need to be clear on the reason they are afforded to high performing people.
There’s a big difference between considering occasional work-from-home key people who are high performers; have young families whom they are deeply attached; and essential to the success of your firm), and a mediocre employee who just doesn’t want to drive to work one day.
The reason you’d want to offer this perk is to retain great employees. Secondly, you’d be telling everyone else a powerful message: If you demonstrate consistent high performance and take responsibility, you will get advantages/perks.
Don’t worry about complaints about treating some people unfairly; you’re setting a standard by which any professional staffer can attain, should they wish.
In “The Real World” today, people get promotions, raises, and perks not just through high performance, but a combination of performance, circumstances and – yes – luck. If you got a new, huge client which needed a skill that only a certain employee has, then it’s likely that employee will see a more rapid promotional and compensatory climb than his peers).
A frequent complaint I hear among many partners of staff is “there are no consequences for [mediocre performance/lack of rainmaking/not caring/fill-in-the-blank].” That’s true. And the reason there are no consequences is that we’ve not made any. We haven’t asked for a higher level of performance nor developed consequences for mediocre performance, either.
A big challenge at your firm – if not the biggest challenge – is recognizing that talent acquisition and development is a major issue. It’s critical to increase revenue and the client base, but in this era of increased consumer expectations and sophistication – the way we did things last year will not be the way things are done 3 years from now. These changes are not cyclical – they are structural. In order to become a firm of choice – for both talent and clients – this needs to be understood.
What do these people want?
I know that continues to be the integral question when it comes to your talent.
Sure, it’s great to get fresh fruit in the kitchen, and no one is going to turn down a free massage, but what truly gets you great employees?
Today, it’s one size fits one, not one size fits all. I’ve heard many asks from employees, and it’s different for every employee, and can be generational in nature but not exclusively so. What is important to one person [work from home] isn’t to someone else.
A great workplace is not espresso, lush benefits, sushi lunches, grand parties, or nice offices. You can do some of these things, but only if they are efficient at attracting and retaining great employees.
What IS important to younger employees – and in my experience overrules every other so-called ‘perk’ a business provides – is meaningful work. The vast majority of people today need to work on something that is impactful to them. They need to feel they’re making a difference.
One of the most transformational conversations I’ve had in the past five years was with [your youngest partner]. At the time (about 4 years ago), she was a manager and everyone knew she was going to be made a partner sooner rather than later. We were talking about her collegiate experience and her career choice right out of college. I professed surprise that she didn’t go with one of the major law firms but instead chose to work at a smaller firm.
She didn’t hesitate. “I wanted to go where I could make an impact and not be a widget.” Meaningful and impactful work was more important to her than the (probable) higher salary and better benefits of a large firm. That’s generational; when I was just out of college everyone wanted to work for that big company and get a chance at moving up the large corporate ladder.
Finally, it’s time to establish a higher level of expectations from the partners and management team. There has been a lack of attention on talent at your firm, and I’d challenge the management team to come up with ways immediately to improve performance and communication. Remember what the four most important attributes in leadership are to firm employees:
- Actions & Behaviors Are Consistent With Words
- Communicates Openly & Honestly
- Helps Me Develop & Grow
- Keeps the Focus on Fixing The Problem Rather Than Finding Someone to Blame
Most of the partner/management team aren’t terrific at any of these, but it doesn’t mean it can’t quickly be fixed. Everyone on the team is very smart – it’s a matter of paying attention and intention.