The Deal with Employee Retention

Here's a story about employee retention and getting paid what you're worth:  I received a call this week from a friend-of-a-friend.

My friend is a famous search engine copywriter, and the friend she referred to me is a smart, friendly, business-oriented 29-year old internet marketer with an unblemished 8-year track record of success with the same Fortune 500 direct-to-consumer company.  Four of those years were in web development.  Within the last four years, she has single-handedly built her employer's organic SEO programs with amazing success.  Her resume is a work of art.

Anyway, this young lady (let's call her "Susan") is looking for new opportunities.

Here's why:  Eight years ago, Susan signed on with her company for an annual salary of $60K plus a $2500 discretionary bonus.  Despite several promotions, "company policy" has held Susan to cost of living increases at 6% per annum, while the discretionary bonus has never changed.  Today she makes $95K + a $2500 bonus.  Her performance reviews have been nothing less than exemplary.

So last week Susan gets reviewed, and -- as usual -- her boss raved about her performance.  All of her KPI's are through the roof.  Yet when Susan mentioned to her boss that people with her background are making $150K base + bonus on the agency side of the SEO business and $125K base + bonus on the client side, her boss said ...

"Susan, if you can get that kind of money elsewhere, go for it. Your employee status allows me to pay you $95K + a cost of living increase. Take it or leave it."

Less than an hour later, Susan was on the phone with me.

Note to HR Managers:  Your employees do not operate in a vacuum.  They know what the market is for their skillset.  In particular, SEO programs are very profitable for both agencies and clients.  Simply put, there is a ton of money washing around in the SEO space.  Most top-flight SEO consultants are being billed out at $150/hour -- and everyone knows it.

The best way to keep your recruiting costs low is to not lose good people.

Susan's defection is totally unnecessary.  She's trained.  She has solid intercompany relationships. She's well-respected by her peers outside of the company.  And her desk is very cash-flow positive. Replacing Susan will be a costly hassle if the company does it without my help.  And if the company does it with my help, I'll charge them 20-25% of the replacement's base salary -- which will likely be $125K + bonus.  The total cost to clean up this mess will be $60-70K.  What more do you need to convince you that you should keep your stars' salaries aligned with the market?

The worst thing a company can do is to motivate their stars to look around.  Trust me, if I get an unsolicited call from one of your A-players, I will remind them that you don't appreciate them.  That's my job:  I'm a management recruiter, and I'm pretty good at it.

And if you want your company to go from Good to Great, for each employee under review ask "Would I hire this person again?"  If the answer is yes, then keep in mind the total cost to replace that person and assign their bonus accordingly.

In the meantime, if you are a corporate recruiter who's looking for a highly-skilled organic SEO program manager (single, home owner, no kids, easy relocation), call me.
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"If you wish to be considered (passively and discreetly) for a significantly better career opportunity, simply upload your resume into my database. Your information will not be shared without your prior knowledge and consent." -- Harry / (678) 795-0900

Comments

[Andy Michaels' Blog on Internet Marketing and Online Success]

That’ s why I was PLEASANTLY surprised when I saw the new course from Jimmy D. Brown.

[Andrea >> Become a Consultant Blog]

I ran into a very similar situation many years ago when I was a young marketer. When I asked for a 20% raise, my VP told me that she wasn't allowed to give me more than a cost of living increase, even though I had delivered results that had both saved and made the company money. I noted that recruiters were calling and offering me substantially more, but that I liked the company and hoped that they could at least compete with an average offer (since I had great benefits and other perks). She told me that if I could get more elsewhere, I should go, because she couldn't compete and that someone like me shouldn't be held back by the company's lowball cost of living increases. A few weeks later, I submitted my resignation so that I could take a job that paid 50% more. The company then wanted to know what they could do to keep me. But it was too late. The new company had my heart. By that point, it was no longer about money. It was about being fair to employees. And so I left, even though I had adored my boss, my role and my co-workers.