New approaches to employee retention

As the economic malaise permeated businesses, downsizing, benefit trimming and pay freezes became the norm. But now as glimmers of recovery offer hope employers are beginning to recognize the impact on employee performance, turnover and engagement.

A recent survey of 1,419 executives worldwide, "Risk Management in a Time of Global Uncertainty" by Harvard Business Review Analytic Services and Zurich Financial Services Ltd., ranked the top 10 risks that have risen most over the past three years. Strikingly, risk related to talent retention and acquisition ranks highest among operational matters and third overall following only natural disasters and continued slow economic recovery.

There is good reason for concern. MetLife's much-discussed 9th Annual Study of Employee Benefits Trends reported employee loyalty on the decline. The study found employers of all sizes had shown productivity gains, but more than one third of workers (36%) were itching to move. More recently, Careerbuilder's 2012 U.S. Job Forecast found that 43% of human resource managers were concerned that top talent could leave in 2012. About one-third of human resource managers polled said that voluntary turnover at their organizations rose in 2011, with employees citing compensation and feeling overworked as the top two reasons for quitting.

The recently released SHRM 2011 Employee Job Satisfaction Survey Report, which also addresses employee engagement for the first time, provides valuable insights for employers. While there have been slight declines in employee satisfaction, more than three-quarters of U.S. employees are satisfied with their jobs. However, less than one-half of them are happy with opportunities for career development and advancement, which increases the potential for turnover as the economy begins to recovery.

Understandably job security has topped the list of job satisfaction factors for the past several years and the fear of job lost still dominates. While 63% say job security is very important to them, only 28% of respondents were very satisfied with their job security and women felt less satisfied with job security than men.

According to Wharton management professor Adam Grant, who studies job motivation and meaningful work, "On one hand, financial security is an important determinant of morale, so there's reason to believe that companies will be facing difficulties. On the other hand, when times are tight, some employees become more grateful for the positive features of their jobs. This is only possible, though, if companies retain the practices that make employees' jobs intrinsically motivating and meaningful."..."When bosses can't promise eternal employment, the best substitute is to offer neutrality, transparency and employee involvement in decision-making."

In the SHRM survey that polled 600 randomly selected employees at small to large companies, the opportunity to use their skills and abilities was the second most important aspect of job satisfaction and their organization's financial stability and their relationship with their immediate supervisor tied as the third most important aspect. Although employees value communication with senior managers, less than one-third of employees reported feeling very satisfied with that communication. According to the researchers this could be driven by economic forces: "If employers don't have good news, it's hard for them to be communicative with their employees."

Notably, the low level of employee engagement is a red flag for employers. Just over one half of employees report feeling focused and enthusiastic about their work, 52% report feeling completely plugged in at work and only slightly more than 40% are satisfied with their career development opportunities.

Even in tough times, fostering employee engagement remains a critical best practice. Here are seven key drivers of employee engagement:

• Commit to employee development as a priority. Despite hiring freezes, re-focusing talent acquisition and retention on internal mobility, whenever possible can help. During uncertain times, promoting people within the organization creates a sense of encouragement and loyalty that can help prevent the mass exodus of talent that typically happens in the aftermath of a recession.
• Be sure that employees can positively answer these questions: What am I doing? Where am I going? and Why am I doing it? Employees need to understand how their work affects business outcomes. Building an emotional connection to the organization itself will stimulate engagement.
• Discuss with employees if they feel their skills are being utilized effectively and ask if they could contribute in other ways.
• Provide appropriate recognition.
• Be aware of the personal characteristics of great leaders.
• Foster open and effective communication as well as co-worker cooperation.
• Clearly communicate the company's strategy and mission as well as core/shared values.
• Fairly and consistently implement workplace practices and procedures.

The true differentiation of any organization is the culture, the people -the talent- and they underpin an organization's ability to remain viable and competitive. Experienced employees have a legacy knowledge and commitment to safe work practices that should not be undervalued.