Hiring, Maintaining, and Retaining the Best Employees

• Publication year: 2002
• Pages: 61

31 Colo.Law. 61 Colorado Lawyer 2002.

2002, January, Pg. 61. Hiring, Maintaining, and Retaining The Best Employees

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61

Vol. 31, No. 1, Pg. 61

The Colorado Lawyer
January 2002
Vol. 31, No. 1 [Page 61]

Departments
Law Practice Management
Hiring, Maintaining, and Retaining The Best Employees
by Lorri Salyards, Mary Matthies

From times of rapid economic growth and low unemployment when law firm support staff can easily "hop" from job to job, to slower economic times, firms need to hire the right employees and need to know how to maintain good employer-employee relationships. This will lead to success in developing a high quality support staff and in retaining the best employees

In the past few years, the job market has afforded many opportunities to employees and, at the same time, has presented employers with hurdles to overcome in retaining their experienced staff. It was not uncommon for an experienced secretary or paralegal to tender his or her resignation for a better paying opportunity across the street. Some firms even paid signing bonuses to recruit individuals with experience in high demand, specialized areas of law. On the other hand, as economic growth has slowed some firms now may be faced with the prospect of "right-sizing" to bring revenues and expenses into line. Regardless of economic conditions, law firm managers must know how to hire the right people, maintain quality employer-employee relationships, and retain their best employees.

The top reasons for turnover at law firms are the absence of a retention policy (39 percent), followed by poor selection and training of new hires (35 percent), poor internal communication (27 percent), and lack of a career planning process (26 percent).1 This article discusses these issues.

The Cost of Turnover

The high cost of employee turnover illustrates the importance of human resources management skills. A leading human resources measurement firm has quantified the loss of a single employee and estimates that, on average, replacing that employee can cost a business between one and two times that employee's annual salary and benefits.2 This firm has developed a formula for calculating the minimal cost of turnover.3 Using a hypothetical example, the cost to a firm that has a support staff of twenty, a 20 percent turnover, and pays an average salary and benefits of $45,000 would be $180,000 (number of employees × percent of turnover × average annual salary and benefits). This is money that comes straight off the bottom line.

More difficult to quantify, but also significant, are the many "soft" costs that result from employee turnover, not included in the above formula. These may include advertising costs, employment agency fees, attorney time required to interview and evaluate applicants, loss of intellectual capital, and hidden administrative costs such as human resources department hours and overtime of existing staff.

Hiring the Best

Hiring "right" is the first step in reducing costly employee turnover and in developing and maintaining a quality support staff. Because of the current shrinking pool of experienced support staff and relatively low unemployment rate, experienced legal secretaries and paralegals are at a premium. Making the right hiring decision today is an important management function that warrants thought and planning.

Preliminary Considerations

The first step in the hiring process should be to determine the answers to the following questions: How does an employee succeed in this position...