Tweet

Are You Worrying about Retention During the Recession? You'd Better Be!

Guest post by: Robin Throckmorton

Article Overview: Is retention an issue for your company? Recently when I've asked this question of folks, their immediate response is a loud "NO" quickly followed by "employees are lucky to have a job right now. We don't have to worry about retaining them. They aren't going anywhere." In a sarcastic tone, I quickly retort with something like, if you were to lose a good employee right now, what would that turnover cost you? After they try to calculate it and get crazy numbers that are so far off base, I'll share the simple rule of thumb of 50 - 150% of the employee's annual salary. Can you afford that expense to hit the bottomline right now just to lose one employee? If that isn't enough to make you think about retention right now, let's talk a little more about the impact of losing even more employees when the economy picks up and the labor market is shor

Are You Worrying about Retention During the Recession? You'd Better Be!

Is retention an issue for your company? Recently when I've asked this question of folks, their immediate response is a loud "NO" quickly followed by "employees are lucky to have a job right now. We don't have to worry about retaining them. They aren't going anywhere." In a sarcastic tone, I quickly retort with something like, if you were to lose a good employee right now, what would that turnover cost you? After they try to calculate it and get crazy numbers that are so far off base, I'll share the simple rule of thumb of 50 - 150% of the employee's annual salary. Can you afford that expense to hit the bottomline right now just to lose one employee? If that isn't enough to make you think about retention right now, let's talk a little more about the impact of losing even more employees when the economy picks up and the labor market is short skilled workers. Perhaps at that point, you'll be ready to listen to some inexpensive solutions. What you do right now for your employees while times are tough will have a direct impact on what they will do when the economy does pick up. In a recent survey released in February 2009 by Salary.com, 65% of employees admitted to passively or actively looking for a new job already. Employers are blind to what is happening and believe that they are in power. In this survey, Salary.com found that 80% of the employers believe their employees would not begin a job search in the next 3 months; at the same time, 60% of the employees said they plan to intensify their job search in the next 3 months. What generally happens in these circumstances is the top employees that you can't afford to lose can find jobs now and even the good / average performers will find jobs at least when the economy picks up. If this happens, you will be left with those that can't find employment elsewhere. If they haven't left yet, you may still have time to show them that you care about them and have a great place to work if you begin investing in retention now.

Just in case that isn't enough...recruiters are finding out that replacing employees isn't as easy as you might think it would be when unemployment levels are at 7 - 9%. Companies that are actually recruiting now are reporting receiving as many as 1500 or more resumes in response to an ad on the national job boards. After spending countless hours screening these resumes, we continue to hear the same message "where are all the good candidates?" We have high unemployment but we are still in a labor / skills shortage; plus employers' expectations are very high given the crunch on keeping expenses down. Filling a position is not an easy task now; nor will it be when the economy picks up. Your best recruitment tool is going to be retention. Spend your money keeping your employees and training them to do the jobs you need them to do. You are likely to spend more money recruiting from the outside and not find the right skills, knowledge, and commitment than what you could spend on retaining and training the employees you already have.

Finally, studies also show that not only is your bottomline impacted by the turnover costs but also a decrease in productivity and customer satisfaction. The more dissatisfied employees become and the less focused they are on doing a good job for you, the less productive they are on the job and more likely they are to impact customer satisfaction. According to Karen Campbell the vice president of human resources and director of the People Management Resources Division at SMC Business Council "Good retention practices go hand-in-hand with customer satisfaction and employee productivity.''

Convinced? I hope so...

So, where do you begin in trying to retain your current workforce? You need to start with your employees. You need to find out what your employees feel are the characteristics of a great company. You can do this through exit interviews (if you are having any turnover) performance reviews, employee opinion surveys, and casual conversations. Think about what you hope to gain by asking them. What are some reasonable questions and steps that you could take to improve the workplace? Don't ask questions about things you can't change or you set yourself up for failure. But, also make sure you are asking questions that will give you actionable results. Once you've gathered the feedback, determine the actions you can take and create a plan. If you are short staffed, involve your employees in implementing the plan. Most importantly, communicate the plan to employees of what you are going to do based on their feedback as well as what you aren't going to be able to do now or later and why. As long as you are communicating AND with sincerity, you'll be surprised at the employees' responses. Some of the best retention plans simply include asking employees, involving employees, communicating, and taking action.

Don't try to copy the retention programs that others do. Figure out what will work in your company and that might even start with a culture change. Often the solutions are simple and not too expensive so don't hold back because you are afraid of what employees may ask for. Some of the response and solutions we've seen have included:

Training and encouraging managers to give more regular feedback

• A more formal reward and recognition program
• A little more fun in the workplace (i.e. boss flipping burgers on a Friday)
• Show employees how they fit into the goals of the company
• Flexibility in the hours (i.e. set core hours)
• Employee development and training
• Improve company communications (even when it is bad news)
• Alternative benefits (i.e. concierge services, dinners to go)
• Competitive compensation (i.e. yes, even during these times of cutback)
• Mentoring and coaching solutions
• Skill development (i.e. job enrichment)
• Respect

Now I ask, is retention an issue for your company? I hope it is a priority!

Related Articles
  Planning Vs Worrying
  Want to Skyrocket Your Career During This Recession?
  About Worrying
  Why You Must Keep Marketing Through The Recession
  Are there any businesses that are recession-proof?
  PAST, PRESENT AND FUTURE TENSE
  Advertising during recession
  STOP WORRYING
  Escape the Worry Trap
  Strategic Thinking To Develop A Successful Employee Retention Strategy According To Your Strategic Thinking Business Coach
  The Wealth Mindset: How to Profit when the Economy is Down
  Fun Recession Activities!
  Many Millionaires Have Been Created During Recessions-Do You Have What It Takes To Join This Group of Millionaires
  The Best Way to Escape the Current Economic Recession
  Is Your Business Tough Enough to Survive Recession?
  Home Business Expert: Direct Sales Is An Economic & Recession Proof Business
  OVERCOMING STRESS
  The Entrepreneur finds Strength in Apparent Defeat
  Seven Years of Bad Luck, or Bad Growth, or Something
  Marketing Techniques During Recession

Article Tags: employee satisfaction, retention, turnover, unemployment



Related Forum Posts
Other Great Books... - Feel The Fear And Do It AnyWay - Susan Jeffers How To Stop Worrying And Do It Anyway - Dale Carnegie ('What's the worst that could happen - the worst?' Then prepare yourself for that and reality is such a relief!).
Re: What is your biggest challenge? Today? - [quote="GT Bulmer":10b1rb6o]sounds like keeping one foot on the dock and one in the boat, doesn't it?) I've had suggestions of interest from other high profile potential clients but I have chosen not to pursue them at this time.[/quote:10b1rb6o] Hi GT, Who knows, perhaps you'll need to take that leap of faith and "burn your bridges" (of escape/going back) like Dale Carnegie suggests in "How to Stop Worrying and Start Living" to get to the next level and reach your income goal. Complacency and comfort can be death.
Betting on the law of averages - Dale Carnegie says "As the years went by, I gradually discovered that ninety-nine per cent of the things I worried about never happened... The most famous insurance company on earth-Lloyd's of London-has made countless millions of dollars out of the tendency of everybody to worry about things that rarely happen. Lloyd's of London bets people that the disasters they are worrying about will never occur. However, they don't call it betting. They call it insurance. But it is really betting based on the law of averages...don't happen nearly so often as people imagine" ("How to Stop Worrying and Start Living" 67 & 68). In the past, I think I spent an additional $130 for "3 Year Return to Depot Service and Technical Support" when I bought my Dell laptop and $30 for 2 years of replacement protection for my glass desk. While I've had to call Dell for technical support for my laptop on a few occasions, I've yet to replace any glass panel on my desk.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Promoting your company and self with verve

Starting A Set of Books

Unspoken Yet Important Rules for Book Proposals

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.