When the going gets tough, the tough hold onto top employees

Retention strategies to keep top talent when you need them the most

For companies going through tough times holding on to key workers can be crucial to a business turnaround.

In the past the natural response to employee retention problems was to increase compensation. But during hard times increased financial rewards may not be feasible. It is likely there will be a cap on payroll, low value stock options, shareholder rejection of generous rewards and an unwillingness to expand benefits. What can an employer do to keep staff during periods of uncertainty or change?

“Don’t underestimate the value of time to employees,” says Lisa Alfieri, an HR specialist with the government of Ontario. “In our fast paced world, time out for personal needs can be as important as money.

“Elder care, child care, education and volunteer work are some of the reasons why staff take unpaid leave. The public sector has used leaves of absence to reduce current head count and salary costs. Instead of managing layoffs, the employer is able to adjust head count over time. Employees return from a leave with new energy and a loyalty to the workplace.”

Another variation on using the value of time is flexible work arrangements.

Susan Turner, director of diversity and workplace programs at IBM Canada in Markham, Ont., says flexible work arrangements help keep employees attached to the workplace.

Workers want time for family responsibilities, personal interests or life transitions. Tools such as instant messaging and video conferencing help staff keep in touch with work while making it easier to see to those non-work related issues.

Benefit plans are also a factor in employee retention.

Michael Thomas, vice-president of the Investment Guild in Markham, Ont., says employers are looking for ways to enhance benefit packages without increasing costs.

“This is a challenge given that the employer’s baseline cost of providing benefits is steadily rising,” Thomas says. Flexible benefit plans are one way to control costs while meeting employee needs. New products like critical care insurance or a health-care spending account will be of interest to mid-career workers at the height of their productivity and could well build loyalty to the workplace.”

Employers may find they need to convince older workers to stick around when early retirement seems like an attractive option. Some workplaces go as far as bringing back retired workers as a way of retaining employee expertise. IBM has a “retiree on call” program where retirees are eligible for supplemental or temporary work.

Rather than reacting to challenges or changes with ad hoc HR tactics, sound human resources management fundamentals help retain employees in bad times and good, says Rose Patten, executive vice-president of human resources at the Bank of Montreal.

“It should not be a case of ramping up programs to meet short-term goals. A strong commitment to diversity and an equitable workplace, attention to flexibility and wellness in the work environment, support for career development and learning opportunities, and listening and responding to employee concerns help to prepare a workplace for whatever challenges are thrown at it.”

For instance, many employees want interesting work. “A focus on training and the transfer of knowledge back into the workplace are a springboard to innovation in good times and bad, and make it easier to redeploy staff if jobs become redundant,” Patten says. “The Bank of Montreal uses ‘career discovery tools’ on the Internet to offer staff insight into their own particular career paths.”

During organizational change there are often opportunities to enrich work experience through special projects or expanded assignments. There are benefits all round whether the employee stays with the company or moves on at the end of the change process.

A strategic approach to compensation can assist in retention. During the pressure to make computer systems Y2K compliant, some organizations offered bonuses to keep skilled staff by rewarding those who met targets or remained to the end of the project.

The Bank of Montreal has a bonus program that includes short-, medium- and long-term incentives stretching out beyond one year to three and five years respectively, says Patten.

“This approach links compensation to ongoing individual and corporate performance. It encourages the retention of top talent at the senior levels through to better times,” she says.

Alfieri says retention poses a particular challenge when an organization or project is time limited and every one knows the work is going to end. It creates a dilemma for the employer if staff know that at the end of the project people will be losing their jobs.

The high-tech sector is full of stories where those in the early rounds of layoffs were able to get jobs in their field while those who stayed with the project to completion faced long periods of unemployment.

As circumstances change it is important to keep employees informed. Proper communication helps workers understand what is going on around them. If employees are expected to make some concessions they are more likely to be supportive if they have been kept informed and treated with respect.

Patten says organizations rarely listen to staff opinions never mind act on what employees are saying. “It is important to understand staff issues. By using a regular survey we can measure employee satisfaction in a wide spectrum of areas. The changes year to year and the nature of the written comments tell us what we need to do to reach our corporate goals. We can act on suggestions and get back to staff with information on why things are the way they are. This knowledge can really pay off in tough times.”

Whether the corporate challenge is a financial downturn, bankruptcy protection, downsizing, mergers or a time-limited project — skilled employees are critical to achieving business goals. Good human resources practices, strategically targeted to employee retention and business continuity will go a long way to ensuring corporate success.

Susan Singh is a Toronto-based freelance writer.

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