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Sam
Smith, Ph.D. For many companies, the current
economic recovery is kind of like watching your worst enemy driving off a cliff
in your brand new Volvo XC-90 - that is, it's a mixed blessing. As the job market
improves (a good thing) your company will very likely face a mass exodus of talent
(a very bad thing). Three long, brutal years of frozen salaries, slashed benefits,
and turtling management have workers fed up. They've been hunkering down through
one of the worst underemployment phases in history, biding their time and polishing
their resumes. Now they're ready to hit the door, and employers who don't want
to take the door in the face need to give their troops a compelling reason to
stay - now, before the first job offers start rolling in. It's
a problem of massive proportions for most companies, because let's be honest,
almost every business in the U.S. has taken advantage of the buyer's market to
squeeze its workers dry, and if this doesn't describe your company, consider yourself
among the fortunate few. The results are predictable: according to several recent
surveys, including one especially damning study from the Society for Human Resource
Professionals, more than eight in ten workers plan to look for a new job when
the economy heats up. While there's a difference between looking for a new gig
and actually jumping ship, that kind of number is still "very, very high," says
SHRP spokesperson Frank Scanlon. As always, you
can expect that your best people will quit and leave the company while your underachievers
will quit and stay. This latter group make up the "actively disengaged" in Gallup
vernacular; they're the cave dwellers who aren't just unhappy at work, they're
dead set on dragging customers and co-workers down with them. If you believe Gallup's
latest U.S. Employee Engagement Index survey - and Gronstedt Group does - the
actively disengaged segment now stands at an all-time high. Only
a quarter of the workers Gallup surveyed agreed with the statement, "The leadership
of my company makes me feel enthusiastic about the future." Responsibility for
this problem lands squarely on management (if not for causing it, they're certainly
responsible for fixing it).
The message is clear: in order for employees to feel enthusiastic about the future
of their company and their place within it, they must have the sense that they
are part of something bigger. Sure, management has been cash-strapped and forced
to tighten their belts. Workers get this. But employers cannot keep cracking the
whip as the job market improves. Instead, they have to begin giving employees
- especially those front-liners that companies rely on to provide a differentiated
customer experience - a reason to stay motivated, and thus, to stay.
The stakes are huge. Once recruiting, training, and lost productivity are factored
in, a national clothing chain must sell 3,000 pairs of khakis to cover the price
of replacing a manager who quits, and while the numbers for replacing a floor
sales rep are less, anyone who ever worked in the retail sector can tell you,
in graphic terms, the impact turnover has on a store's operation. In other sectors,
the tab for replacing a typical middle manager runs about $100,000, and this is
just the expense side of the equation. Never mind the opportunity costs of customer
defection or missed up-selling/cross-selling opportunities. When
we consider the full range of costs associated with turnover, any program designed
to improve loyalty among star performers can pay for itself, and quickly, if it
manages to prevent even a handful of people from leaving. Such a program would
include research to identify workers at risk of leaving, communication, training,
recognition, rewards, and promotions designed to boost loyalty. An investment
in the employees that embody the brand on the front lines will pay dividends long
after the investments in more traditional marketing activities has tapered off.
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