TouchPoint Recruiting Group

Retaining Top Talent as Economy Recovers

By Mark Barnhart, CPC, CERS

Director, TouchPoint Recruiting Group, LLC

Most companies recently have found themselves worrying about the day-to-day operations of keeping the ship afloat in the rough seas of the current economy. Many have inevitably been forced to deal with letting a member of their team go to reduce costs or battle slower production. Much thought may not have been given to the retention of current employees. But, it is worthwhile to consider, “What will happen once the seas calm?”

In a recession, turnover of staff might not be viewed as a major problem. Some companies may even view voluntary turnover during a tough economy as a positive thing if it helps to reduce overhead. But even as employees are digging in and not actively looking for a new opportunity, their loyalty and their views of their current employer are being shaped dramatically.

The employees who were fortunate enough to make it through a layoff or cutback with their jobs intact have a wave of emotions running through their heads right now. Some may feel guilty that they made it through cutbacks with their job intact while a co-worker did not. Others might feel nervous that their job will be the next one eliminated. And many are just trying to keep their heads above water by doing whatever it takes to weather the storm.

When the seas calm (and history shows they must) those same employees who weathered the storm may become top talent for competitors if employers aren’t treating them or their co-workers with respect today. With companies making cuts and employees living through these uncertain times employers need to think about where they will be after the recovery. If an employer isn’t taking the time to reinforce its commitment to its current staff, and if those employees who have been terminated haven’t been treated with respect and care, an employer may be in worse trouble after the storm, adrift without a crew.

Keep in mind that when cutting or watching costs closely, the cost of retaining top talent is far less expensive than attracting and replacing that same talent later. Lost time, lost productivity, increased training, and even lost client relationships are all associated with the high cost of turnover.

With the fact that a talent shortage existed and was growing worse well before the latest economic storms hit us, we know that when the storm clouds clear and the economy begins to climb back, employers will be faced with not only fighting competitors for the same talent, but also forced to replace the talent they will ultimately lose to turnover and attrition. And although the recent downturn in the economy may push some baby boomers retirement plans back a few years, the bottom line is that they will still be leaving the workforce in large numbers in the next few years.

The U.S. Department of Labor’s rule of thumb puts replacement cost as equating to 33 percent of the annual salary of the individual being replaced. Most executives tend to push that number much higher for top talent. Start now to retain top people. Employers can’t completely stop voluntary turnover (nor should they as it provides a healthy stream of new ideas and new talents to a company). However, employers can keep the inevitable turnover from sinking the ship.

In some cases layoffs have pushed remaining staff to their limits. Sure, there are numerous cases where companies have learned and adapted to do more with less. But, if employees are feeling overworked, doing their job plus the job of three former employees, burnout won’t be far behind. In many cases employees are finding themselves taking on new responsibilities and duties but feeling overwhelmed with the responsibilities. Employers need to help people obtain the proper training to succeed with these new responsibilities, and if warranted, provide them with the recognition and financial reward that comes with the new duties.

To keep all hands on deck:

  • Communicate. Talk to employees. The easiest way to retain talent seems to be the hardest for so many companies. Keep communication lines open with all employees, but at a minimum identify key people and keep them informed. Even the best of the best feel at risk when they see their co-workers laid off or leaving for other opportunities. Make sure they know they are valued and continue to give them challenges. People want to know that they’re needed. If they think they’re being under appreciated, they’ll find someone that will appreciate their skills.

  • Involve the management team. Most managers right now are focused on short-term life saving techniques. They’ve been told to tighten the life vest and find a way through the storm. When management is so focused on the short-term financial situation, the people that run the ship are often forgotten. Make certain that the message that needs to be conveyed is coming from the top, but also being reinforced from the entire management team.

  • Reward. Don’t take current employees for granted and certainly don’t overlook the “A players.” Everyone (even top talent) is feeling stress during this current economic environment. If someone is going above and beyond, or someone has added tremendous value to the company, don’t wait to acknowledge them and certainly don’t wait to reward them. Reward doesn’t have to mean an increase in salary. Bonuses, time-off, dinner or lunch all go a long way in maintaining the loyalty of employees. If an employer won’t do it, the competitors will.

  • Provide Flexibility. Cell phones and the Internet have made working from home as easy as working from the office. Allow the “A players” the flexibility and freedom to complete projects while also caring for family matters or taking care of personal business. Top performers will not abuse such privileges.

As a Certified Employee Retention Specialist (CERS), Mark Barnhart is one of only 50 recruiting and staffing professionals nationwide who are certified to advise clients on specific recommendations to help find and retain top talent.