After watching a few departures from my company, I have come to realize the cultural importance of employees. Each employee contributes in their own way to the company in terms of work ability and cultural value. When an employee works for a company, they’re working for the company because they believe in the company’s product line, they enjoy the development environment, and they feel like they’ll contribute to the company while growing with the company.
When an employee leaves a company, they not only reduce the total work capacity of the company, but they also reduce the cultural value. The benefits received by other employees will definitely be diminished. Sometimes this loss is small, sometimes it’s great, and sometimes they might even have something to gain.
When an employee leaves, it starts a snowball effect. If any of the employees were on the fence about leaving the company, this indicates that marginal benefit is equal to marginal cost. If marginal benefit is a factor of cultural value, then this would imply marginal cost now exceeds marginal benefit. Thus, that other employee leaves. Then people who are affected by employee 1 plus employee 2′s departure will now depart and etc.
In order to avoid this, the company will then have to increase the marginal benefit the remaining employees to stem the snowball effect. You can probably even measure the cost of the cultural value of the employee by how much money you’ll have to spend to keep the remaining employees on board. This effect is greatest if you have a large employee base, and the employee has a great effect on other employees. If an employee is leaving, you’ll definitely have to take these things into account before quickly dismissing him. If possible prevent the departure of the employee altogether, if not pray that you’ve done the cost-benefit analysis correctly otherwise the fate of your company might be at stake.
