Bursts of analyst departures in a hot research area is not unusual

The clump of departures of social media analysts – Brian Haven, Peter Kim and Charlene Li (from Forrester), and Rachel Happe (from IDC) – is not at all unusual and follows typical patterns.

There are several reasons why analysts leave a firm: just want a change or new professional challenge, recruited by another company, desire to start own firm, the current employer has grown too large and its culture has changed and a few others. In this current sitaution, there are two primary reasons why the analysts are leaving: lured by startups and hanging out their own shingle.

From late 1997 to early 2000 a number of analysts covering ecommerce/ebusiness got lured away from the firms by Dot Com startups. For example, in one week Gartner lost four of five analysts covering ecommerce. Yes, they were lured away by various startups dangling stock options, but these analysts were also annoyed at the money Gartner was investing in Jupiter Communications (ancestor of JupiterResearch) rather than beefing up Gartner’s own ecommerce/ebusiness research team.

Another common reason for analysts in a hot research area to leave a firm is to capitalize on their personal brand by setting up a single practitioner or boutique firm. This approach provides the departing analyst more flexibility and the perception – not always realized – that they can make more money on their own than as a salaried employee at a large firm.

In this situation, Brian, Peter and Rachel left for hot startups, while Charlene is hanging out her own shingle. Typical.

Another point to put these departures into context is normal employee turnover. If an analyst firm keeps its analyst workforce turnover under 3% (which would be a really good retention rate) that would still mean that Forrester would lose 11 analysts annually, IDC 24 and Gartner 20. So losing a few analysts, even in a clump and on a hot topic, is not necessarily an indication of problems at a firm.

Bottom Line: Rather than jump to conclusions that the departures of multiple analysts in the same hot research topic represent dire implications for a firm or analyst industry, members of the analyst ecosystem should step back and calmly analyze the situation. Are the departures a typical response to a hot research area? Or do the departures represent a systemic problem for a firm?

Question: Have you seen other bursts of analysts leaving firms? If so, what topics and when?

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6 Responses

  1. […] Some other analyst industry observers will no doubt be hyperventilating about the dire implications for Forrester these departures entail. Calm down. Take a deep breath. While a temporary setback for a particular Forrester analyst team, these bursts of departures from a hot research area are not unique (see here). […]

  2. This is an interesting area at the moment and there definitely does seem to be more churn in hot research areas. Looking at the wider picture though there are signs of an overall decline in analyst positions over the last year – http://ataresearch.blogspot.com/ – but how this impacts on AR is another question.

  3. This is an interesting area at the moment and there certainly seems to be more churn in hot research areas. We have just published a post looking at how the AR and analyst job markets have changed over the last three years http://tinyurl.com/56j5e5

  4. I agree with the analysis, Carter. And let it be known that although analysts are rumored to have large egos, I don’t think any of us expect Forrester to be any worse off. I mean, they took the savings from my salary and bought Jupiter! ;)

  5. […] that happens at every firm and most every individual’s career. As we pointed out a year ago in Bursts of analyst departures in a hot research area is not unusual, there are always analysts leaving firms for a variety of reasons. The reasons that Ray gave in his […]

  6. […] handle) and two other social media analysts left Forrester Research in the summer of 2008 (see Bursts of analyst departures in a hot research area are not unusual). So was Forrester doomed? Not at all. It still retained Groundswell co-author Josh Bernoff (blog, […]

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