Companies Can't Ignore Employee Retention

Article excerpt

Companies have been so focused on getting rid of workers in an era of downsizing that some have forgotten how to hang on to them when they need to.

The result is that many companies are now facing a crisis quite opposite one they wrestled with a few years ago. Rather than trimming the payroll to beef up profitability in the short term, they need to keep more people on board to prevent their bottom lines from taking a dive.

But that's trickier to do in a work environment in which workers have begun to discover they have power and choices. Unemployment is at all-time lows, and so is loyalty, said Lynn Ware, president of Integral Training Systems, a national consulting and training firm based in the San Francisco Bay area. Companies, particularly technology-based ones, have been coming to firms such as hers to relearn the principles of employee retention. "There's a wave beginning to happen," said Ware, who has noticed heightened awareness of this issue in the past year. "Companies realize they too have to be concerned about people leaving." In the information-technology industry, for example, one in 10 positions is open, she said. And people report that they are being called at least once or twice a week by headhunters. A year ago, Ware was still running across the persistent attitude that "there are always people standing at the door to replace those that leave," she said. In addition, employers had the mind-set that attrition was inevitable and they couldn't do anything about it, she said. "They figured, why bother?" But cutting attrition rates by even a few percent "can be a phenomenal drop to the bottom line," Ware said. It saves companies money directly by reducing the costs of training, recruiting and relocating new employees. It also results in indirect savings. People who are leaving tend to be less productive, she said. And vacant positions represent lost opportunities. There are steps companies can take to bolster retention. "Up to 75 percent of why people are not staying has to do with factors that are in the control of managers," Ware said. There are several factors that correlate with employee commitment. The first is achievement. "People don't want to stay where they feel like they're losing," she said. People need a sense that they are winning at their job. Managers should take care to make sure they are tailoring assignments to insure a good fit between a person's skills and the project or task, she said. …