Athough I’m looking forward to the coming turnaround as much as anyone, I’m concerned that many companies may not be prepared for the talent war that almost certainly will ensue. Employees have stayed in place because they’ve had few, if any, alternatives. Far from being happy, they’ve been demoralized by downsizings, worn out by carrying extra workloads, stifled by the lack of advancement opportunities, disappointed by slim or nonexistent salary increases, and frustrated by bonuses that failed to materialize when performance goals were achieved. No one should be surprised when the mass exodus begins.

It’s been long enough since the last talent war and the intervening period has been so tumultuous that many organizations have lost sight of the importance of managing retention. For the past 18 months, The Ayers Group has been urging clients to refocus and put retention strategies in place because once the revolving door is in motion it will be too late.

Our white paper, “Retaining Valued Employees” (available at www.ayers.com), puts retention in perspective, examining the reasons why employees leave or stay, exploring the roles of the organization and the manager, and laying out strategies, tools, and best practices.  As its findings indicate, “Your best defense against poaching is an ongoing retention plan.”

Managers are the key

The case for having a retention program in place is compelling. Turnover is expensive and the full cost is rarely understood or taken into account. An unplanned defection can cost up to four times the departing employee’s salary when you factor in the cost of recruiting and bringing a replacement up to speed—not to mention intangibles such as lost productivity, quality, contacts, institutional knowledge, etc.

According to our research, an employee’s relationship with his/her boss is the single most critical factor affecting retention. Too many managers mistakenly believe that money, benefits, and perks—issues beyond their control—are the retention hot buttons. In fact, for most employees, and especially younger ones, expectations go well beyond money to things such as jobs that are exciting, engaging, and allow them to make a valued contribution to a mission they buy into. Companies whose managers understand that and who are in touch with their employees will be the most successful at holding onto valued human resources in the months ahead. 

The manager’s top tool for retention is being able to answer one question: What keeps my employees here?  If you are an effective manager, you know what is important to each of your reports and what he/she likes about working with you and for the company. You accept responsibility for managing to these issues—which do lie within your control—to help retain star employees. This is not the latest management fad or a kind of manipulation, but the foundation of a positive, proactive management style.

Single out the stars

Right now, your chief objective should be to single out your best, most desirable, and hardest-to-replace employees and make plans for keeping them. At the same time, start thinking about replacement strategies because, despite your best efforts, you aren’t likely to keep them all.  

Which brings me to the point that an effective retention program begins with the hiring process.  Job descriptions, recruitment, selection, and orientation are the program’s foundations. You also need to consider

§        What about your firm should be attractive to potential employees 

§        What story about your firm people should come away from the recruiting process with, even if you don’t hire them

§        What you can do to ensure that expectations raised during recruiting will be fulfilled as you and your new hires work and grow together