Loss of key employee(s): The risk critical to every organisation

Hard To Fill Shoes "Everyone is replaceable" is a lie, according to Liz Ryan

Wed, 2 Dec 2020 Source: Justice Peprah Agyei

"Everyone is replaceable" is a lie, according to Liz Ryan. She believes if we were truly hiring people who could be replaced at any moment, we'd be doing a terrible disservice to our customers and shareholders.

While it may be true that an organization’s employees are its greatest asset, they can also be one of its greatest risks when not managed well. It is true that, not all of the possible reasons for an employee's resignation are within an organization's control. Some may include the following;

* To start a business or

* For a better position offered elsewhere, or

* Move to another town for personal reasons.

* Be dissatisfied in the current job for various reasons that may not be controllable by the employer.

When an employee resigns, the loss to the organization is the future value that the individual would have provided to the organization. Employee's replacement could reduce the organization's loss risk, but some will remain until the replacement employee reaches the same level of proficiency as the person who departed. Can your Organisation analyse the key employees who have resigned due to something that could have been managed by management? Can you imagine how your Organisation would have been if all these people were still around bringing to bear their rich experience.

Again, it always costs more when the company wants to immediately replace with someone of same level of expertise and experience. It would still cost you time and other resources for the new experience person to adapt to your organisation’s culture.

Resignation of key staff also discourages existing staff. Customers also begin to lose interest when staff on their schedule keeps changing because of resignation. It takes away their confidence and trust. Causes of dissatisfaction that may lead to staff resignation may be resolved with a cost-effective or feasible change, such as shifting the employee to a new position or assigning new responsibilities.

Occasional reviews of the workforce’s demographics can illuminate the risks of, in the case of a predominantly young workforce, potential mass resignations as employees seek new employment opportunities and career advancement.

Duplication as a risk management control measure can also be used to reduce the impact of key staff resigning. An example of duplication could be cross-training employees so that each has a variety of skills. There’s still risk if all or majority resign regularly.

It is also very important to assign coaches or mentors to especially the young ones in the organisation. This will enhance communication and problem-solving. Staff would feel the warm of management.

Staff should be made aware of their succession plan and a clear path of development. This will eliminate insecurity and increase their trust in management. This makes it easier for individual staff to align their personal goals with organizational goals.

An organization should be concerned when the frequency of employee departures increases. Determining the cause of these departures is essential because it may indicate problems within the workplace. For example, a worker who is treated poorly by a manager may find the work environment intolerable and resign. When this occurs, a risk management professional needs to determine whether this is an isolated incident or other workers have similar impressions of the manager. Exit interviews can reveal whether other workers have resigned for similar reasons; the issue may concern just one manager or may be prevalent throughout the division or company. Another risk is, when people fail to provide the true reasons why they are resigning at exit interview.

In all these, it is very important for every organisation to have a holistic view of their Enterprise Risks. It is also important to have a Risk Manager who will coordinate these risks which include Hazard risks, Operational Risks, Financial Risks and Strategic risks.

There are basically three things employers must do to keep employees self-motivated which include;

• Recognize great work

• Ensure employee stay fueled (food is important)

• Encourage regular breaks (flexible working hours)

Columnist: Justice Peprah Agyei