Employee Goodwill, Engagement, and Retention

Thursday, March 04, 2010

Why should any organization be concerned with employee retention during a period when the labor market is rich with talent? First, nothing will last forever, even a talent pool as deep as today’s. Only a few years ago that talent pool was not so deep. There are still skill sets in short supply, even in todays down economy. Second, an organization expends significant and scarce resources to locate, acquire, and train the talent it has today. Now that the organization has invested in the acquisition of that talent, all other things being equal, it will want to realize a return on that investment. An organization’s talent hosts a wealth of knowledge concerning the inner workings of any organization, knowledge that could be useful to a competitor.

The U.S. Bureau of Labor Statistics (BLS) reported employers completed 1,761 layoffs in January 2010, resulting in 182,261 worker separations. At the same time, the BLS reported that the number of layoffs, which peaked at a high of 2,913 in March 2009, has been declining month over month. The payroll-processing firm ADP reports an upturn in employment given a 1st quarter GDP 5.9% growth rate. Kohl's Department Stores announced the opening of 30 new stores and adding more than 1,500 employees in 2010. Advantage Direct Communications Inc.’s new Reno call center operation added 150 jobs in February 2010. Talgo, a Spanish train-maker, is bringing 125 new jobs to Milwaukee in June 2010 with the reopening of a former automotive site. While most economic watchers predict the jobs recovery to be slow and long, recovery is within the near future.

The problem with any recovery is the unpredictability of the jobs created, the skill sets needed, and where those jobs are located. The BLS reports that demand for nurses (RN’s) is expected to grow at an annual rate of 22% through the year 2018. Engineering employment is expected to grow at 11% annually from 2008 to 2018, however, certain industrial sections may actually see a decline, i.e., manufacturing. The top five jobs, as reported by the BLS, with the highest growth potential are biomedical engineers, Network systems and data analysts, Home health and Personal care aides, financial examiners, and Medical scientists. With last month’s announcement that the government would provide loan guarantees for two nuclear reactors and up to 18 nuclear projects in the planning phase, the industry may need to hire upwards of 25,000 workers over the next five years according to the Nuclear Energy Institute.

While industrial espionage may have visions of James Bond like covert activities, sometimes it is nothing more than the organization’s top sales person departing with the top account. A former employee’s knowledge of the organization’s customers, clients, internal workings, methods, and practices can give their new employer certain advantages. “Credit Suisse Securities USA offered the group of investment managers “tens of millions of dollars” to leave Goldman Sachs in an act of “pirating,” according to the complaint filed Feb. 17. Several of the managers immediately began soliciting former clients in violation of their Goldman Sachs contracts, the investment bank said.” “Microsoft says a startup founder took a job at the Redmond company under false pretenses, then used his inside access to download confidential documents for a patent complaint his company has since filed against major computer makers.”

The relationship an organization builds and maintains with employees during the bad times is going to shape the employees’ opinions once the economy turns around and may well determine whether they stay or go. Moreover, if they do go, what will the organization lose in addition to an employee?