I was talking to the CEO of a private equity firm. I was curious to know how they evaluate firms. Among various criteria, he mentioned an intriguing one. He said, “We try to find how many life members are there in the company.”
“Who are the ‘life members’?”
He said, “Those who have been with the company for 10-15-20 or more years and who are unlikely to leave.”
Earlier, people used to have “lifetime jobs” in which they spent their entire work life in a single organization. After joining, they would continue in the same company till they retire.
In a time when people jump companies every 2-3 years, such “lifetime employees” are extremely rare. These days, it is not easy to retain employees for a long time.
But if a company has many employees who have been with it for more than a decade, it must be doing something right. Employees stick longer with a company if they see their stable and growing future there. That is a very strong indicator of its policies, practices and prospects in the future.
We see a large number of decades or centuries-old classic companies which have survived and thrived because of such “life members.”
A high attrition rate is one of the major challenges facing companies and a strong symptom of weakness which may pose a serious threat to their survival and stability.
On the other hand, if there are employees who have been there for a long time, it provides a range of advantages in addition to stability. The company can respond to customers fast. Its cost and efficiency can improve because of reduced training costs and learning curve advantages. It also helps to win customer trust and loyalty because long-term employees can develop a relationship with customers.
Retaining “life members” requires pragmatic and employee-friendly policies. We must be sensitive to their long-term needs and aspirations. We must also abandon the belief that people work and stay only for money. People expect respect and recognition in addition to more than satisfactory remuneration.
* How Many Life Members Are There In Your Company? *
I was talking to the CEO of a private equity firm. I was curious to know how they evaluate firms. Among various criteria, he mentioned an intriguing one. He said, “We try to find how many life members are there in the company.”
“Who are the ‘life members’?”
He said, “Those who have been with the company for 10-15-20 or more years and who are unlikely to leave.”
Earlier, people used to have “lifetime jobs” in which they spent their entire work life in a single organization. After joining, they would continue in the same company till they retire.
In a time when people jump companies every 2-3 years, such “lifetime employees” are extremely rare. These days, it is not easy to retain employees for a long time.
But if a company has many employees who have been with it for more than a decade, it must be doing something right. Employees stick longer with a company if they see their stable and growing future there. That is a very strong indicator of its policies, practices and prospects in the future.
We see a large number of decades or centuries-old classic companies which have survived and thrived because of such “life members.”
A high attrition rate is one of the major challenges facing companies and a strong symptom of weakness which may pose a serious threat to their survival and stability.
On the other hand, if there are employees who have been there for a long time, it provides a range of advantages in addition to stability. The company can respond to customers fast. Its cost and efficiency can improve because of reduced training costs and learning curve advantages. It also helps to win customer trust and loyalty because long-term employees can develop a relationship with customers.
Retaining “life members” requires pragmatic and employee-friendly policies. We must be sensitive to their long-term needs and aspirations. We must also abandon the belief that people work and stay only for money. People expect respect and recognition in addition to more than satisfactory remuneration.
A large number of “life members” in its team is certainly a competitive advantage for any company. If a company wants to survive and thrive, its leaders must be watchful of its attrition rate and they must do everything to increase the number of such “life members” in their team.
-Sanjay Shah
SME Business Coach
-Sanjay Shah
SME Business Coach