RSM Resources

The next time you lead a staff meeting, consider this thought: About three of every four people in the room may be thinking about another job.

In a poll conducted by the Society for Human Resource Management (SHRM) and the Wall Street Journal, 78 percent of workers currently employed said they were likely to start or accelerate a job search as the economy improves. Fully 65 percent of executives polled said they were actively looking for new employment, compared with 47 percent of non-management workers and 45 percent of middle managers.

While those numbers mirror findings from several other recent studies on employee retention, most companies have yet to take the issue seriously. According to the SHRM report, two-thirds of human resources professionals surveyed said their firms had no strategies in place to anticipate and reduce turnover.

For one noted human resources expert, that approach is a lost opportunity to "re-recruit" key workers who may well have one foot out the door.

"Too many companies are forgetting all the work that went into hiring these people — interviews, background checks, and perhaps even a bit of persuasion to bring them onboard," says Roger Herman, president of the Workforce Stability Institute in Greensboro, N.C. "The smart employers are those who build on that original investment by helping employees gain new skills or prepare for more challenging responsibilities — while consistently providing market-competitive pay and benefits."

The benefits issue is of increasing concern to workers. According to the SHRM Career Journal study, 68 percent of employees ranked solid medical, dental and retirement benefits as the most important aspect of job satisfaction. Interestingly, human resources professionals responding to a companion survey rated benefits as the third most important issue for workers, behind the relationship with direct supervisors and recognition of job performance.

In a recent RSM McGladrey Advantage Quick Poll, over 68 percent of the respondents said they use flexible work arrangements and professional development as tools to retain key employees, while just 15 percent use stock options as a retention tool.

In the Quick Poll, 72 percent thought non-management or staff positions are at highest risk of turnover in the year ahead. Only 1 percent of respondents said the same of executive-level jobs.

Jennifer Schramm, SHRM’s manager of workforce trends and forecasting, says that the perception gap between worker and employer shouldn’t be misunderstood.

"While there’s increased awareness that solid benefits are a key factor in attracting and retaining good employees, companies are having a harder time delivering them," she says. "Because health care prices continue to rise, companies haven’t made too many changes in their benefit offerings, but they have tended to shift more of the cost burden onto employees."

In addition to benefits, pay and recognition, workplace safety has vaulted to prominence as a critical element of job satisfaction. In an earlier SHRM workplace poll, taken right after the Sept. 11 attacks, only 36 percent of employees rated safety as a very important issue. In the current study, that number jumped to 62 percent — by far the largest increase of any category.

In the near term, retention may be a bigger issue in certain industries — such as defense contractors, oil and gas producers, or accounting — where demand for quality talent is at a premium. However, as the leading edge of baby boomers become eligible for retirement, experts believe that all business sectors will need to become more strategic about identifying, cultivating and keeping staff with vital skills.

"I think this means a lot more firms will be developing individual retention plans, which may include market pricing for unique or critical abilities," says Schramm, "And, as part of this change, human resources professionals will increasingly need to focus on ways to integrate retention into succession planning."

Are you in need of some tools to tune-up your retention efforts? Experts suggest the following tips:

Find out what your employees think. A well-crafted survey, administered by an outside provider to ensure confidentiality, can be well worth the investment to help a company pinpoint recurring issues that contribute to employee turnover or dissatisfaction. A more focused approach on this theme is to identify top performers and invite them to individual discussions on job satisfaction and career planning. In either scenario, follow-up is critical. Experts emphasize that opening the door for feedback, but choosing not to act on the information, can send messages that will hinder — not help — retention.

Set a clear — and consistent — tone from the top. In a 2005 SHRM Workplace Forecast, 92 percent of executives said employee alignment with business goals was important to overall success. However, many of those same leaders do not effectively communicate key business objectives or the nonfinancial elements that make the company distinctive. Savvy executives will bridge that gap by regularly updating workers about business performance, praising specific work units or individuals for important contributions, and reaffirming how the company lives its mission, vision and values. The effectiveness of this step can be measured in regular employee engagement surveys or in smaller focus groups held on an annual or semi-annual basis.

Strengthen the manager-employee relationship. Retention studies consistently show that the supervisor-employee relationship is one of the biggest factors in whether the worker chooses to stay or leave a job. However, managers are frequently evaluated on their technical or financial competencies — not on their ability to motivate and interact with staff. But that strength will become increasingly important as labor force dynamics continue to change.

"A lot of traditional human resources functions are now being pushed down into various work units, and that means mid-level leaders need to learn how to effectively handle staff-related issues," says Schramm. "We’re now seeing a trend where companies are striving to improve how line managers work with people of different generations, or with different cultures. I think that’s a strong signal that more businesses are recognizing how important that mid-level supervisor is in keeping quality employees onboard."

Consider flexible work arrangements. Nearly 60 percent of employees in the SHRM study said "work/life practices" — such as flextime, telecommuting and compressed workweeks — were very important to job satisfaction. However, only half of human resources professionals in that same study said their companies offered flextime, and only one-third had active telecommuting or compressed workweek options. While such choices may not work equally well in all business segments, experts warn that as the labor market becomes more competitive, many employees who feel strongly about balancing job and family commitments will leave firms that don’t meet their needs.

Invest in a culture of learning. When times get tough, companies frequently pull back spending on conferences, seminars and learning opportunities to focus solely on day-to-day operations. However, that approach can stifle new ideas, creativity, and ultimately lead to worker burnout. A cost-effective way to handle this issue is to develop a strong internal corporate development program, where employees have individual learning plans that are tailored to company and personal needs. Herman, from the Workforce Stability Institute, says that approach avoids "stand-alone" learning in favor of development opportunities that help improve the company’s bottom line.

By taking these steps, you will improve your company’s ability to keep good workers when new opportunities arise.