| Topic Name: |
FY05 Attrition Nearly Hit 35% |
| Message Name: |
Playing Devils Advocate |
| Date Posted: |
01/04/2006 |
| In Reply To: |
As publicly disclosed in October the attrition was over 25% at that point. The fourth quarter should have brought them to about 35%. Just looking for inputs from folks as to why they would still want to join this firm, or stay? |
| Message: |
Playing devils advocate for a moment, attrition is not always a bad thing.
If you run the numbers for the last 3 quarters assuming a 25% attrition rate and major hiring to replace attrition, you will find that over half of the company are new hires with lower salaries and positions.
Notice that we are losing MDs, Sr Mgrs, Mgrs, and Consultants, but hiring tons of MAs and Consultants.
If the right people leave (i.e, those that are highly compensated and provide no leadership or skills) then the company will pull in higher revenues based on the margin between the client bill rate and the actual employees salary plus overhead.
The obvious problem with this scenario is that if the wrong people leave, the company will be left with a bunch of people with little experience and no leadership.
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