In project management, there’s one inescapable risk. I’ve just started a new project, and yes, the same risk is on the list as it was in the risk register for over 100 of the projects I completed. People… When I meet with my team at the initiation of the project, we try to identify risks and follow the steps suggested in the PMBOK 6th Edition. The risk of losing a talented employee in your team is always identified as one of the risks of any project.
Although the probability and the impact of this risk may differ from project to project, it has always been on my priority list to focus on my people. In order to handle this challenging risk, we should be aware of the factors that may increase the probability and the effect of this risk.
One inescapable risk of managing projects
Here are three factors that can increase the probability of the people risk:
- Turnover rate: Company culture surrounding how to value and care for its people, its policies to concerning how to maintain its people in the company and how attractive the working environment are main factors that result in the turnover rate of a company. A company with a high turnover rate will have a high probability of losing people. Hence if you are a project manager in a company with a high turnover rate, you should manage this risk wisely.
- Leadership: Even if the company provides the best working environment, a team leader, a section manager, or a group leader that lack leadership skills and soft skills may cause team members to resign. There is a popular saying mainly mentioned by the human resources specialists “people do not change their companies but their managers.” Lack of leadership will increase the probability of losing people
- Project organization: Companies may have a lot of projects with limited resources. In some cases, projects have a high priority to the organization may demand people from the projects that have lower priority. Hence projects that have lower priority will have a high probability of losing people.
In addition, the factors that increase the probability of people risk, here are two factors that increase the effect of this risk:
- Knowledge transfer: If a company doesn’t have a strong knowledge transfer framework, the impact of losing people will be higher. Each lost person will take their knowledge away with them if the company and the project do not have an established framework for keeping this knowledge in the organization. Hence the project schedule and the project cost will be negatively affected by the loss of people and knowledge.
- Recruitment pace: It is also critical to be able to find and recruit a new person to replace the resigned team member. The faster the recruitment is achieved, the lower the effect of the lost person will be.
In looking to avoid inescapable risk, the structures, procedures, machines or ERP software packages are not the primary factors that make the project go on and deliver the product successfully. It’s the people. As a project manager, be proactive and always try both to minimize the risk of losing your people and the impact of losing them.
Mustafa Hafizoglu, PMP, BS, M.Sc., is the co-founder and previous President of the PMI Chapter in Turkey, Program Director at Space & Defence Technologies Co., a part-time instructor at Middle East Technical University. He has 20 years of experience in hardware and software development projects, in the aerospace and defense industry. Mustafa established the PMO at SDT Space and Defense Tech and co-authored the book: Project Management Analytical Approaches. He’s also a speaker at PMI Global Congress and various international seminars. Mustafa writes about program management and risk management.