High employee turnover: How to fix the problem at your agency

Written by: Karl Sakas

Employee turnover is one of my 3 Golden Agency Metrics—a key thing to track as an indicator of your agency’s health.

As I recently shared, you want voluntary turnover to stay under 10-20% annually. Otherwise, you’re losing institutional knowledge (and you probably could use some help becoming a better manager).

Fixing high employee turnover isn’t an overnight fix, but the answer starts by figuring out why people are leaving.

In my experience, this typically involve a combination of one to four causes.

Why are employees leaving your agency?

Here are common reasons I’ve seen at digital marketing agencies—high employee turnover frequently involves a combination of these reasons:

  1. Disorganization: If you’re totally disorganized and people get frustrated working with you, get help. That might involve hiring a virtual assistant, getting a business coach, or both. Bouncing payroll is a good way to make even loyal employees start looking for a new job.
  2. Toxic Clients: If your clients are toxic—or even just unreasonable—you need to do a better job managing client expectations. Get my free eBook, Don’t Just Make the Logo Bigger: Taking Clients from Painful to Profitable. Also, see how many bad clients you can afford to fire—I have a free template you can use to figure out where to start. Happily, the biggest pains are frequently the least profitable.
  3. Limited Advancement: If ambitious employees don’t see room for advancement, they’re going to leave. Figure out how to create a career path, either through promotions or additional responsibility. And customize the opportunities to each person, since their motivations will vary.
  4. Unaccountable Coworkers: When you let bad employees get away with poor behavior, you’re only driving away the good—and-great—employees. I saw an agency wait four months to fire a new employee who turned out to be quite toxic—during that time, two good employees quit… including the agency’s most-billable employee.

Think about why you’ve left jobs in the past—you can probably think of at least a few additional reasons.

Fixing high employee turnover

The next step depends on the root causes of employee turnover at your agency.

If it’s terrible clients or toxic coworkers, start setting and enforcing boundaries—bad people are going to drive out the good. If your agency doesn’t have opportunities for professional advancement, figure out how to let people get ahead. And if you’re a difficult person to work for, think about whether it’s time to finally make some changes—if no one’ll work for you, you’re not an agency any more.

Think about what you want to change first… and then act. For instance, I recently advised a client to “fire” a client that was consistently rude and disrespectful to his employees—that should help him retain people longer, since he’s demonstrating to them that his team comes first.

Question: What’s the first thing you’re going to change at your agency?

Book Cover: "Work Less, Earn More" by Karl Sakas

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