Why the legal and finance industries are failing to retain talent

Kim Pullinger, Contributor · 09 May

Staff retention is an issue for both the legal and finance industries who employ a combined 1.3m people in the UK – one million in finance and 300,000 in legal.

When it costs them roughly £40,000 to replace an employee, it’s vital these two sectors look to bring down their 9.5% staff turnover rate.

Shared retention challenges

Ambiguous job descriptions

A large majority of HR managers in the legal sector identify poorly written job descriptions as a driver for high staff turnover. That’s because it can lead to mismatched job expectations, causing employees to become frustrated with a role they expected to be completely different and leaving.

When a job description doesn’t attract the right talent in the first place, the quality of candidates are not going to be what that business is looking for. The amount of time and money involved in recruiting employees means businesses should ensure their job descriptions match the employees they need. Having the wrong people is only going to make them leave or have the company have to make that difficult decision.

Short-term targets

Law and finance are both fast-paced, high-pressured environments which make it difficult to align with long-term, company-wide initiatives. As many employees in both sectors focus on short-term projects, working on higher goals can slip down the list of priorities.

Man with short term target

This short-term focus has created working environments which prioritise instant success over building stability. More impressionable, younger workforces can align that short-term thinking with their own career and see these companies as being only stop gaps in their career. If a business prefers fleeting success, why shouldn’t the employee?

Mergers and acquisitions

Mergers and acquisitions are commonplace in the finance and legal sectors. Often regardless of the state of the economy. During times of profitability, the biggest banks and law firms expand by taking over smaller institutions. During recessions, stable firms often negotiate low-cost deals to acquire assets held by other firms who are in trouble.

When these mergers happen, company culture can change, new systems have to be learned and relocation might be required. This new and stressful environment can lead to higher levels of staff turnover, especially if expected to move to another part of the country.

How HR can solve this

Engage employees and solicit honest feedback

Reputation does proceed law and finance firms and they rely on it to attract talent – but that’s not enough to retain employees. HR should look at ways to implement a productive working environment which mitigates the fast-paced nature of the business.

For example, a professional and a safe space to talk to them would help to prevent burnout. This would vastly enhance the employee experience and engage staff with an employer who they see takes their mental health seriously.

Receiving continuous, two-way feedback from employees is also vitally important. It gives them the opportunity to speak up about the company and give HR points to action. This can be done in town-hall style Q&As or through online survey tools which allow employees to express their honest opinion, anonymously. And taking in feedback during mergers and acquisitions is an especially effective way to prevent a mass exodus.

Employees giving feedback

Invest in retention skills

Rewarding talented employees who have given years of hard work with managerial positions is often a good retention driver. However, it might not be a surprise to know that the best lawyers or financial experts don’t always make the best managers.

When in management positions, these newly promoted employees need to know how to deal with the people who they are managing. Training managers on how to proactively identify employees who are at risk of leaving can be key to getting those staff retention figures down. Investing in training that is customised to the needs of your company can make a huge difference.

Give employees independence

Millennial employees are known to job-hop more than the employees before them so it’s important to give them something tangible to align to. Project autonomy is one of the most craved job qualities from that generation and gives them an opportunity to express themselves. Allowing employees to choose or design their own projects can be an excellent way to maintain a motivational working environment.

Pro bono work

Allowing employees to undertake more pro bono work could be a practical way to do this. It gives them the chance to expand their skills and experiences, which they will bring back to the business and help in tackling more diverse portfolios. Employers who trust their employees to work autonomously in areas which interest them show they value their young workforce and want them to succeed.

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