Consulting: At this point in the economic recovery, what misconceptions about staff retention are common in the minds of consulting firm leaders?

Finnegan: There's this broad brush thinking that during a recession no one leaves, but we know that's not true. According to the U.S. Bureau of Labor Statistics, there was only an 11 percent drop in the number of people who left their jobs voluntarily between 2007, when the market was on fire, and 2009, when the bottom fell out. So, it's important to realize that you're always at risk of losing your top talent—and there's almost as good a chance of losing good people in good years as in bad years. Good workers can find good jobs in any economy.

Consulting: But given the improving economy, voluntary attrition is a bigger issue now than it was six months ago, right?

Finnegan: Yes, but not necessarily for the reasons you assume. Of course, as the economy gets stronger, there will be more opportunities at other firms and in industry. But there's a bigger factor at play: the aftereffect of last year's layoffs. A University of Wisconsin professor tracked 1,000 companies that had applied to Fortune magazine's Best Places to Work rankings. He found that for every 1 percent of staff that is laid off, voluntary attrition increases 31% over historical levels in the following 12 months. In other words, if voluntary attrition had usually been about 10 percent, in the year following a 1 percent layoff voluntary attrition would be expected to jump to 13.1 percent. If the first round of involuntary staff cuts is fat, the voluntary attrition loses muscle.

One on One with Finnegan Mackenzie's Dick Finnegan

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