Employee Retention After The Recession

Monday, February 01, 2010

Depending on which economist you believe or which paper you read, the recession is not over or very close to being over or we are headed for a “double-dip”.

One report I read this morning used the words “very dismal’ when a noted New York University professor spoke to a group of financial leaders yesterday in Switzerland describing the US economy. In another report, the words “roaring back” were used to describe US exports. However, the National Bureau of Economic Research, the official arbitrator of economic growth and recession has not yet declared an end to the current downturn.

Even in the worst economies, retention of an organization’s “key” talent is essential to being able to maintain and grow the business. While it may seen counter intuitive to talk about growth during a recession, remember that even in an economic downturn, there are organizations that thrive. A Saratoga County, New York business has seen growth in its pet food specificity store as pet owners are willing to spend on their household pets even during a recession. Community colleges and other schools are reporting record enrollments as out of work employees return to school to retrain or beef up their knowledge and skills.

A recently released Conference Board report indicated that less than half of all US workers are satisfied with their jobs. The survey of 5,000 households found that only 45% were satisfied with their jobs. The report concluded that employee retention would suffer as 25% of the respondents expect to change jobs within a year. Studies by the Saratoga Institute (PricewaterhouseCoopers) indicate turnover costs organizations from 12% to 40% of pretax income, no insignificant amount even at half that value. Therefore, it is no wonder that more and more organizations are rethinking their employee retention strategies.

The time to develop retention strategies is not after the organization’s top talent is walking out the door going to the competitor down the street. Visionary employers like Monsanto and others (SAS, Edward Jones, Google, DreamWorks Animation SKG, Qualcomm, Cisco, Whole Foods Market, Goldman Sachs Group, Novo Nordisk, Scottrade, Quicken Loans, Alston & Bird, Aflac, Adobe Systems, Ernst & Young, Microsoft, Mayo Clinic, CarMax, Men's Wearhouse, Deloitte, PricewaterhouseCoopers, American Express, Children's Healthcare of Atlanta, Mattel, Marriott International, S C Johnson & Son, Arkansas Children's Hospital, Publix Super Markets, KPMG, General Mills, FedEx, Gilbane, Intel, Winchester Hospital, Colgate-Palmolive), to mention a few, have active employee retention programs designed to keep their best performers. These organizations and others recognize the need to retain the talent needed to sustain and grow their business, even in the best of times and the worst of times. It is also no surprise that many of the above are also in the top companies to work for as determined by Forbes and other publishers.