Why Should You Care about Retention in a Recession?

Are you adapting your HR strategy and approach to the changing needs dictated by the recession? I was somewhat surprised to see these recent findings:

“A survey of 336 senior HR practitioners by consultancy TalentDrain found just a third (31%) were adapting their approach and putting a renewed focus on existing employees. Organisations which had changed their HR strategy were concentrating efforts on existing staff, with 72% giving increased priority to organisational management, 67% to communication, and 54% to employee engagement and retention.”

However, it is encouraging to see that those organizations that do understand the need for change are focusing on the critical areas of communication, engagement and retention in such high numbers.

Salary.com reported even higher numbers with 63% of employees admitting to looking for a new job. Bosses have little concept of this, believing only 41% are looking.

Why is retention so important in a recession? Three reasons:

1) Keep your top players engaged in your organization and focused on your priorities (and, of course, away from your competitors)

2) Engage your middle tier of employees to create networks of success – foster teamwork up and down the chain. After all, your top performers can’t deliver the results you need in a vacuum.

3) Ensure you are staffed appropriately for when the upturn comes.

Appropriate staffing is a delicate balance, expressed best by Fred Crandall of Watson Wyatt Worldwide: “The biggest issue our clients face right now is regaining momentum when business picks up, while having to hire the fewest number of new people.”

The company best poised to take advantage of the eventual upturn is the one that does not have to seek out new talent, train them, incorporate them into the company culture, steep them in the strategic priorities, and only then begin to see results. This ties into the point I made last week about the fallacy of across-the-board, indiscriminate layoffs. A recent article in the Boston Globe highlighted this point well:

“Make cuts and freezes based solely on employee performance and future opportunities. While this approach is logical and appears obvious, too many organizations take the misguided approach of spreading the pain around the organization, "to be fair" (i.e. 10% layoff for each division, one person cut per manager, company wide hiring freeze, etc.). Think about the company that instituted a company-wide hiring freeze so that all managers felt treated the same: if one division is shrinking and one is growing, it does not make sense to treat these divisions the same; yet this is the approach many companies take.”

Where does retention rank in level of importance for you or your organization now? What are you doing to ensure your top performers stay, your middle tier are engaged and working well as team, and your staffing levels are appropriate for today and when the upturn comes? Share your techniques in comments.