A friend of mine owns a large textile manufacturing company in Indonesia; more than two years ago he decides to develop an ERP system with a big IT company in Jakarta (let's call it the Supplier from now on). The cost was US$90k, and was to finish in a year.
Now, two and a half years later, the code is buggy. It has undergone a total revamp from VB to PHP. And the worst thing is, the software is still not finished.
My friend told me why.
The first project manager (PM) assigned for my friend used VB.
He resigned from the Supplier to pursue a career elsewhere.
So the Supplier assigns another PM, who decides to do everything again using PHP.
That second PM also didnt last long; he was enticed away by another employer in Singapore.
After that second PM, there is basically no PM for my friend.
The Supplier just put three PHP programmers in the factory fixing bugs and making smart excuses.
What happen if these three programmers also resign / quit from the Supplier?
My friend (the client) will be as stressful as the Supplier. My friend can go to legal way, but that's probably too much hassle and too much time and energy has been invested in these 2+ years.
What I want to discuss here is the very negative effect of employee turnover, both to the client and to the company who employs him, especially in people-intensive business like us. Luckily we have managed turnovers pretty well. We are far from experts on HR (that's why we're hiring an HR executive early next year), but let me share some things that may be useful...
1) Simple things like always try to hire a good, loyal person, and enter a stronger binding contract, and always try to give the best (sincerely) to him. Motivate and keep employees happy.
2) Always lookout for degrading employee motivation, or for signs of dissatisfaction. This is especially important for employees who is the only one who knows the ins and outs of a project. Be always paranoid; ask yourself a question, what if this person or that person leaves our company tomorrow?
3) Once you identify these employees, you can solve their problems. For example, increase salary or give bonuses. Or give holidays to refresh. Or try to set a timetable for rotating him out of the current project that bores him.
4) For IT projects, use a framework that favors convention, like Ruby on Rails. It enables other engineers to jump into the project more easily. We should also inject another engineer to the project if possible, so that there is no knowledge lost. All the knowledge that the problematic employee knows must also be known by this other engineer.
5) If there is no knowledge lost and no project goes awry, turnovers is actually not that bad. In fact, turnovers is sometimes a good thing; to weed out those who are not performing well, not motivated, and not loyal. Turnovers is also good to refresh a company with new spirits and insights.
***