Increasing Our Focus on Retention
For six years, Tony was a loyal, hardworking employee who gave his all for the company’s benefit. John, the CEO, valued Tony greatly and gave him increased responsibilities, greater pay, a higher position title, and a company stock option. When making business projections, John included Tony as a key contributor to future growth.
Then the national economy crashed, and businesses everywhere began hurting. Over the course of several painful months, John had to lay off several employees and make company-wide pay cuts, even suspending his own salary. To his shock, Tony came into his office one day to give his resignation. A friend had offered him a more responsible position and better pay, and Tony was ready to jump at the opportunity. John was truly happy for Tony, but frustrated at the loss this meant for his own company. In the difficult months that followed, he found himself wondering what he could have done differently to retain Tony. If the economy had remained healthy enough to sustain company growth, would Tony have stayed?
The Disconnect
It’s a question that business owners and human resource leaders constantly ask themselves: What can we do to keep our best employees? A recent study of U.S. employers and workers shows that, even in difficult economic climates, workers still have high expectations of what their employers should be doing to retain them. The study, released by Spherion Corporation, revealed that only one fourth of workers are very satisfied with both their compensation levels and their growth and earnings potential at their current employer.
Clearly there is a disconnect between employee expectations and the realities of keeping a business afloat during a downturn in the economy. 54 percent of workers do not believe they are paid what they are worth! The challenge this creates for businesses, according to Roy Krause, Spherion® president and CEO, is that “as soon as job creation starts up again, employers who haven’t focused on retention could face high levels of turnover as workers seek positions at employers that offer them greater workplace satisfaction. It is imperative that HR executives realize that the actions they take during a downturn will impact the bottom line and potential growth of their organization in an upturn.”
We all know that as the economy recovers, retaining employees will be a key element of our success; so what are the most important factors in making employees want to stay? According to the study, the most important element is financial compensation and benefits packages, but growth potential and work/life balance were also found to be crucial. This is good news for companies that are not yet in a position to increase their compensation and benefits packages.
The Solution
It’s a known fact: unhappy employees who are dissatisfied in their work and who feel their contributions are not valued and appreciated are easily poached or enticed away by promises of greener grass. Research shows that as the economy improves, workers tend to demonstrate confidence in their market value through voluntary termination—the willingness to change jobs for a better opportunity. Conversely, happy employees whose work is satisfying to them and who have found their place in the organization are far less likely to move. So, while the economy is stabilizing and companies are aiming toward profitability, we each can focus on hiring people who are a good fit for the job and for our organization. Doing all we can to keep our employees fulfilled in their roles is the best action we can take toward retention.
What does this mean to John, whose company is still struggling to recoup the losses of the past year? Like many businesses, John’s isn’t able to give raises yet—the company is just starting to show a profit again. And he already offers a better benefits package than many competitors do. The office currently celebrates Casual Fridays and enjoys a relaxed, fun atmosphere. What more can he do? For now, John will have to focus on retention using means other than direct pay, such as employee recognition and awards, special events like a surprise lunch or a baseball game outing for the whole team, and a drawing for an evening on the town. Having recently lost a key manager, John is also planning to offer additional training and development for those interested in management training. And once a month on Fridays, he intends to let everyone go home early.
Every business has its own culture, so what we each do to retain our employees may look somewhat different from what John will do. The important lesson for us to learn from John’s experience is that we must consciously focus on retention. Helping our employees fit in today will pay off tomorrow when the economy improves, new jobs are created, and our employees choose to stay where they belong.
By Marcianne Kuethen – © Amtec 7/2010