Employee Turnover

Please welcome a new post category, MBA Content.

When searching for an MBA, I often wondered what on earth people do for two years, and this category will help answer that question. I’ll be including a few things that we’ve been squirreling away on that I’ve found particularly interesting or surprising.

This first note definitely fits into the surprising category, and it’s about employee retention. (Not anal retention.) The “mom and apple pie” line on retention says that you should love your employees, make them feel cared for, and you are doing well if they love you back. See Apple. See SAS.

So – why has it worked for them? Being nice to employees means that they stay. That’s an advantage in an area like software – you only have to take a quick look at the Daily WTF to figure out why. When people leave, they take a lot of knowledge with them, and it takes a long time to train someone new up and be as productive as someone who is experienced.

Someone who has been working for a software company for a long time is worth MORE than someone who hasn't.

Now let’s look at McDonalds. The employee churn rate is, obviously, very high. Now we can deduce why the Golden Arches don’t want to spend money on extra benefits for their burger flippers – it’s incredibly easy to train a replacement. (Remember Lester Burnham.)

Someone who has been working for McDonalds (on the front line) for a long time is worth NO MORE than someone who hasn't.

So, this is where “mom and apple pie” doesn’t work. A company like McD (or Foxtons, or whoever) should be putting money into anything other than benefits, teaspoon races and group hugs for their employees, whereas any software company worth their salt should be providing free transport, gourmet food and beanbags at every corner.

Google doesn’t seem so fuzzy now, does it?