A recent OI Partners-Venturion review of 262 companies revealed some interesting insights:
- Almost two-thirds (64%) are apprehensive they may lose managers in a better job market.
- About half (48%) are concerned about losing executives.
Replacing an executive or manager who leaves for another job, or one who turns out to be a bad hire or promotion, can be costly, according to the survey:
- Average of 2.5 times an executive's salary
- Average of 2 times a manager's compensation
The costs are for recruitment and training of the employee who leaves and his or her replacement, lost business, and severance pay and benefits.
Additional insights include:
Consequences of hiring or promoting wrong executives:
Lower employee morale: 81%
Decreased worker productivity: 74%
Lost business and market share: 53%
Higher employee turnover: 48%
Consequences of hiring or promoting wrong managers:
Lower employee morale: 84%
Decreased worker productivity: 82%
Higher employee turnover: 59%
Lost business and market share: 52%
Top reasons why executives do not work out:
Fail to motivate workers and build teamwork: 65%
Unable to accept changes that have occurred in workplace: 45%
Lack skills critical to success in their jobs: 35%
The top reasons why managers do not work out:
Fail to motivate workers and build teamwork: 56%
Unable to accept changes that have occurred in workplace: 55%
Lack skills critical to success in their jobs: 51%
Importantly, more than half (52%) of surveyed organizations said their managers do not have the right skills to achieve their goals. Over one-third (35%) said their executives are lacking the right skills to move their organizations forward.
This means there is a great deal of opportunity for those can effectively articulate a value proposition to an organization and have the strategies in place to get the opportunity to talk to a decision maker.
