Influence of experience on performance
The phrase “there are no irreplaceable people” is generally true but the loss of a team member, in most cases, leads to a temporary decrease in the overall performance and certainly loads the other team members.
To find arguments about the impact of the turnover on the sales teams results in a company I worked for, I compared two indicators:
- sales results
I averaged the achieved sales results for a calendar year by group of employees according to the company’s length of service and added the percentage of turnover for the respective group.
To measure the sales results I used the percentage of the received bonuses compared to the base amount of the bonus. The data presented in the graph below are not real but are close to the obtained result.
As it can be expected, the results, and hence the amount of the bonus, is increasing with the increase in experience. During the learning curve (about two years), employees have partially achieved their goals.
After that he average results reach and exceed the targets. However, in parallel with this, the turnover also increases and after the second year exceeds 20%. The chart shows that in case of replacement of an experienced with a not experienced employee, the employer loses results of over 100% for a period of about 1.5 years and replaces them with much lower performances. In other words, the achieved results will be restored within a longer period of time and at the cost of additional investment (for recruitment, on boarding, training, development) or with a high cost of attracting an experienced employee. Let’s not miss the fact that we give to the competition a built professional who is expected to be productive within a short amount of time after his/her appointment.
Of course the data in the chart is not enough to undertake specific actions but it provides a focus for in-depth analysis and need for:
- Additional information on the reasons for leaving
- Satisfaction survey among employees with over 1.5 years of experience
- Further analyses of the labour market data
Such an analysis would be a good basis for undertaking retention actions for high-performance employees regardless of the size of the organization.