Conventional wisdom says that a building a successful business is about building long-term client relationships. Long-term clients also refer more business and eliminate new business acquisition costs. McKinsey & Co., a global consulting firm, does not measure/reward partners on billable hours, but length of client relationships.
“But to keep clients long-term, you need to keep your people, who are at the front of client relationships,” said Tom Corcoran, CEO, Corcoran Expositions. “Employee turnover not only undermines long-term client relationships, but replacing and training employees can also get very costly.”
The cost to replace an employee is generally 20 percent of annual salary for mid-range positions (earning $30,000 to $50,000 a year). According to a Deloitte study, it takes a new employee one to two years to reach the productivity of an existing worker, and according to the Bureau of Labor Statistics, the average employee length of stay at a job is only 4.4 years.
As one of the country’s largest independent tradeshow organizers, Corcoran Expositions have produced more than 700 conventions in 100 cities over the years. They generated $35 million in exhibit sales and contracted 3,000 new exhibiting companies for their clients in 2014, while employing 34 people. Their success has been built on long-term client relationships, including one tradeshow that has been with them all 25 years. Their average client relationships is 10 years – unheard of in any business.
How does Corcoran do it? By keeping employees long-term with a friendly, cordial workplace with an open floor plan type office that promotes lots of employee interaction, and a unique incentive: when an employee reaches their 10-year anniversary, they are given three months off, paid, no questions asked.
“In the last 10 years, 12 Corcoran employees have celebrated 10-year anniversaries and have taken three months off to celebrate,” said Corcoran. “Some used it for extended maternity leave, some spent time with family, and some went biking in France. This summer, three Corcoran employees were on a three-month leave – one toured Europe, one spent extended time with family and one simply enjoyed the summer in Chicago.”
Next year, two Corcoran staffers will be celebrating 10-year anniversaries – for a second time – and will be eligible for a second, three-month paid time off.
For more information, go to: http://www.corcexpo.com/