5 reasons top performers will leave when the economy rebounds
October 1, 2009 by Sam NarisiPosted in: Economy, Retention, Special Report
Some managers think their best employees will stick with the company just because they have nowhere else to go — but that type of attitude could leave many employers with a huge turnover problem in the near future.
Once more jobs are available, current employees will jump ship to take them. In fact, 54% say they plan on changing jobs once the economy rebounds, according to a survey from Adecco Group North American.
And the younger employees are, the more likely they’ll be out the door at the first opportunity. Of employees ages 18-29, 71% plan to look for a new job after the recession.
Why? It’s easier now than usual for employees to get disgruntled, considering many have survived layoffs and been asked to do more work for less pay.
To compound that, too many managers think they don’t need to worry about retention when the economy’s tanked.
But a lousy job market really only delays retention problems, which could leave companies stuck with a mass exodus of top talent.
Here are the top ways managers ensure people will leave the company as soon as they can:
- Staying silent – Employees need honest, open communication. When managers withhold information, employees will always feel uncomfortable and on edge.
- Being too cynical – Being honest and open doesn’t mean only focusing on negatives — employees still need a healthy dose of good news. To provide that, announce and celebrate the company’s small victories.
- Keeping employees out of decisions – Top performers want to know what’s going on — and feel like they’re making a real impact in the company’s future. Managers should involve employees in some of the decision making about cost-cutting measures. That’ll generate some good ideas and make employees feel trusted and valued.
- Forgetting the little things – Even when budget cuts lead to benefit reductions or salary freezes, there are still some low- or no-cost benefits managers can add — for example, flexible scheduling and training.
- Ignoring compensation concerns – Though everyone should understand what difficult times mean, top employees still want to know their interests are important to the company. It’s important for managers to maintain an open dialogue throughout the entire process and remind employees that only their hard work will ensure that pay raises are available in the future.
Tags: Adecco, managers, rebound, retention problems
October 2nd, 2009 at 9:23 am
The grim reality is that most companies won’t have to worry about it for at least another 3-5 years. With the current administration’s approach to improving the economy, there is no way we will see improvements till they are gone. So, retention won’t be a big issue for a while. In fact, most companies will be struggling just to stay in business.
October 2nd, 2009 at 9:57 am
So negative, DD. By this time next year we’ll be back to “normal.”
October 2nd, 2009 at 10:21 am
@DD i thought the same thing as I was reading this…
@John, normalcy to you must be grim then… NONE of the fundamentals have changed. NONE of the lessons learned. We are in the same place but with much, MUCH more debt.
By this time next year, China will foreclose on the U.S.
October 2nd, 2009 at 11:01 am
Our company keeps our employees informed through monthly meetings held plant wide. We also have kept our employees engaged in making constant operating improvements. We have a turnover rate of less than 1% and an employee absent rate of around 0.7% per month. In a heavy manufacturing plant we neither have employees absent, nor turnover in the operation, nor are there many problems.
What I cannot stand is and find this just stupid is: (1) Do you get your employees involved? Is your facility or company operating on a thought process of well those hourly employees cannot find their way out of the rain, how could they help anyone else. We do not think like that and neither should you but so many companies do.
Is your management team viewed as being better than the rest of those other people? Does you HR person sit on their butts all day instead of being active? Does HR person find more reasons being absent and out of the office then working on helping their employees.
Are you other managers more worried about what they are going to get and less about the rest of their co-workers. Did I hit a nerve?
China will own and foreclose on America. Or we will find ourselves in a war and OH WE OUTSOURCED EVERYTHING AND DO NOT KNOW HOW TO REBUILD ANYTHING BECAUSE CHINA HAS ALL THE DRAWINGS AND KNOW HOW!
October 2nd, 2009 at 11:19 am
I thought that this was a blog in regards to keeping top employees; it has turned into an economical debate. On the subject at hand I agree that within a year the number of available jobs will rise and employees will leap! If they have been working with the same company through this hard time, I ‘am sure that they have taken a lot of hits as it relates to more workload, less appreciation and the worry each and every day that they may be jobless. Managers/Owners need to take the responsibility of reassuring to the best of their ability the clear message, and that it “Thank you” Thank you for being such a dedicated employee, we look forward to rewarding your efforts after we surface through this hard time.
October 2nd, 2009 at 11:43 am
What are you trying to say, DD? You want Bush back?
October 2nd, 2009 at 11:44 am
Let’s wait until October is over. Then the high stock market will begin to plummet since there is no profit being made since profit in the current regiment means evil.
October 2nd, 2009 at 11:52 am
I personally am not interested in getting Bush back, but I am pretty sure that our current administration is aiming for a “quick” fix at the expense of destroying us 10-20 years down the road. If you think my fears are unfounded, just google up some data on how much our national debt is rising because of our current administration’s decisions. You will be completely shocked. I know our president is great in front of a camera, but the numbers don’t lie.
It is like I just realized that I personally am $1 million in debt and decide that the best course of action for my family is to not deal with reducing spending or paying off the loan, but to take out another $10million in loans and celebrate the fact that we have more discretionary income.
October 2nd, 2009 at 12:20 pm
@DD and Richard the current administration is saddled w/ digging us out of the Dubya circumstances. The biggest problem with the current approach is not forcing what’s good for the country on those who don’t want to take their medicine. Niceties and bi-partisanship will not accomplish anything b/c all the right wants is for the current administration to fail no matter how much it hurts us ALL.
October 2nd, 2009 at 12:39 pm
Could also have been entitled 5 reasons top performers will leave when the economy is rock bottom. Companies assume that their top performers will stay simply because the job market is bleak. My best job changes have been at the rock bottom of recessions (including this one). I left for the reasons listed above. I didn’t wait for better economic times. Even in the worst of times, good jobs are still available. Companies need to realize that their top performers may just find them.
October 2nd, 2009 at 1:22 pm
Kudos, Laurin, for trying to get the conversation back on track to what it should be about, which is employee retention. Enough of the government smackdown PLEASE!
October 2nd, 2009 at 1:25 pm
I am so sick and tired of people ragging on the administrations with regards to economy. It doesn’t have any direct bearing on this article. Recovery will occur at some point but last I checked no one had a working chrystal ball.
This article points out ways to keep employees, it’s not limited time wise to next year, five years or ten. I do HR work in California in a field that regularly has 40-60% turn over. The main reason, at our company, we have turn over is because people have moved out of state or the area where there is a place of employment with the company. My area has a 10% turn over. The points in this article are ones that our managers practice on a regular basis and to prove it we have former employees waiting in the wings for an open position so they can come back.
Costco recently had an article in one of their publications about interaction between managers and those managed which brought up similar points to this article. It reinforced the idea of positive interaction, allowing structured choice and transparency in action. That’s not to say we are so transparent that battle plans are on CNN but that people are given enough information to understand why something is being done so that companies get the necessary “buy-in” from their employees.
October 2nd, 2009 at 1:28 pm
I echo Laurin’s statement about this turning into an economic debate and would stretch a little further to say that this is potentially becoming a partisan discussion. We get it, the economy sucks. Unfortunately, there isn’t an owner’s manual to fixing it. Criticism is only worthwhile if accompanied by a plausible alternative.
Now, with regard to retention, I am also optimistic that we’ll see some positive change late in 2010. I don’t think we’ll see the mass exodus referenced in the article. Those of us fortunate enough to remain employed often understand that our employers are doing the best they can and when hiring and salary freezes are lifted, people will enjoy their workplaces again.
For the 71% of youngsters surveyed stating that they’re leaving once the economy gets better, my question would be, how many of them were in their ideal jobs prior to the economic downturn as opposed to people that have just taken whatever is available? For the latter, yes an exodus is expected, but they probably weren’t the top talent to begin with.
October 2nd, 2009 at 1:29 pm
As the HR person for a medium-sized company, I have been preaching this to our managers for years. Yes, we do have company wide meetings once a quarter in which our CEO shares information regarding where we are financially in comparison to FY ‘08 and what we are doing to grow our numbers. That’s all fine but, between those meetings, information MUST be shared by the department managers and supervisors. In addition, more appreciation needs to be shown to the employees who are doing more with less and we need to be more open to the fears and concerns our employees have.
At our last quarterly meeting, it was announced that we will be going another year without pay raises due to the economy. I talk with our employees every chance I get and am lucky enough to have gained their trust enough for them to be comfortable being candid with me. Many of them have confided that since hearing that, they have updated and posted their resumes on job boards or, if they haven’t already, are seriously considering it. I fully believe that it will be a matter of 6 months to a year before we start to see these people moving on to greener pastures.
I watch the job boards closely to get an idea of where the market is and, in the past few months, have seen a significant increase in the number of jobs being posted. If you think there is no need to worry about losing good employees any time soon, you should open your eyes or you will be one of the employers who will lose the most.
October 2nd, 2009 at 1:31 pm
We took this as an opportunity to review all our systems. As we continue this approach; management and employees have joined together in a common goal…survival. In order to prevent layoffs we have come up with ideas to cut cost. We are currently inching toward the $300,000 mark in cost saving ideas from our employees and for a company with less than 140 employees that ain’t hay.
October 2nd, 2009 at 1:59 pm
Well said, Laurin. Your last sentence is great advice for any employer hoping to retain their top employees when the job market rebounds. Most people don’t mind taking one for the team, as long as that is acknowleged and sights can be set on a future reward once things turn around.
October 2nd, 2009 at 2:03 pm
I love it! You blame the current administration of twenty years of bad policies! What’s wrong with doing a good job yourself and respecting your own employees?
October 2nd, 2009 at 2:14 pm
I work for a government contractor which had a contract with the Dept of Defense since 1979. We recently found out that our competitor won the current contract. Due to circumstances, we believe it is possible to win back the contract but we are now in a waiting mode. Our craft are being taken care of, as it should be. They are the bread and butter of the company. But we overhead folks, HR, payroll, accounting are pretty much left in the dark. Not involved in any decisions and God forbid, we even think about asking about the lost compensation we had, i.e. employer match, 100% company paid medical/dental, bonus’, etc. Two out of our department are gone, so naturally their responsibilities were split between us remaining three. I realize these are hard times and the lost compensation was expected. After all the company has to survive, but it’s like since we’re overhead we don’t matter. We’re replacable. It’s almost like management resents us!
I agree totally with this article. I’m looking now. Not much out there but if I find anything remotely better, I’m outta here!
October 2nd, 2009 at 2:24 pm
Question: Was the economy in toliet before January 1, 2009 or what? I believe Bush was in the whitehouse in 2008 when the economy was headed to doom! Quite frankly I do not like Obama or Bush. Bush spent more than Obama, and he was spending it overseas. Obama is spending it all in the US and some of that money came out of my pocket. Two wrongs = two wrongs!
October 2nd, 2009 at 2:33 pm
Oh that is right it is 2 PM. That means HR has gone home. No more comments.
October 2nd, 2009 at 3:09 pm
I work in a very small manufacturing company, the biggest reason I believe that people will leave is the management seems to hold their jobs over their heads and actually uses lines like “it beats unemployment”. So as an HR person still on the job at 4:08 pm Harry, I believe if you treat your employees fairly no matter what the economic circumstance, you will retain your key performers.
October 2nd, 2009 at 3:38 pm
TH, CARE TO SHARE ANY OF THOSE COST SAVING IDEAS? I’M SURE WE ALL COULD USE SOME OF THEM. THANKS
October 2nd, 2009 at 4:02 pm
Thanks Tina for backing HR. Harry – I am the HR department at my company. I arrived at 7:30am and won’t leave until at least 6:00pm (even on Fridays) so please don’t generalize based on what appears to be your poor experience with HR. As for the topic at hand – we too are in manufacturing (aerospace) and have been able to limit layoffs to just a handful, yet still cut costs significantly without jeopardizing our contractual obligations to customers. Our success is due to a true team effort from everyone – including the janitorial staff! You just need to COMMUNICATE, COMMUNICATE, COMMUNICATE! Whether its good or bad news, employees not only want to know…..they deserve to know. While we don’t share the actual P & L statements, we are pretty transparent about the health of the business and then LISTEN to feedback from employees. All of our decisions aren’t easy to make and employees don’t jump and shout with glee when they learn those decisions, but they appreciate being a part of the process. Based on the relationship between employees, management and our owners – I don’t anticipate any of our employees “jumping ship” when the economy begins to recover.
October 2nd, 2009 at 4:07 pm
The article states that your best people will jump ship. Trust me when I say that your best people are already being hounded by recruiters just waiting for this turnaround. They are telling their top customers about this great hotshot over at XXXX company and that they have to have them.
I am telling my customers to start interviewing now by phone and online with candidates for jobs that won’t open until the economy turns around. This way they/I will have candidates ready to go when things do turn around. If you have not let your best people know how much you appreciate them, you better do it because me and others like me are coming to get them.
October 2nd, 2009 at 4:29 pm
@RR
First, I am not a Bush fan. Second, the current state of the economy is mostly due to those in Congress during Clinton’s term that pushed for giving loans to people who could not afford them. You can thank Frank for most of it. Now he wants to bail out those in foreclosure, which is simply doing the same thing all over.
http://www.youtube.com/watch?v=Lr1M1T2Y314
http://www.youtube.com/watch?v=ahtuNt3AKCg
Third, The huge bail outs are both Bush and Obama. However, Obama has taken that even further and has us in such debt, that we will not see ourselves out of it in our lifetime I fear.
Honestly, this is about the current topic and how premature this topic is. Jobs coming back? Can we at least stop losing jobs before we talk about a come back.
October 2nd, 2009 at 10:01 pm
I work as HR Head for a multinational manufacturing plant in Malaysia. From my past experience of 25 years in the field of HR, I can vouch that key personnel will move even in bad times because they are good at what they do. Thus, it will be not an easy task to retain people who are always on the lookout for better pay/perks etc. no matter during the boom or doom. It is not easy as well to just keep increasing people’s pay and perks when the company is struggling to keep afloat. We have to worry about the sakeholders too. We did not and have not so far retrenched anyone or reduced salaries and perks but we have cut all business trips (and now we know that some of those trips are not neccesaryat all with the advent of internet and teleconferencing; and that in itself, from my cultural perspective, is admirable.
Secondly, my personal believe is that all processes and systems must be documented via a Standard Operating Procedure (SOP) and in that way at least some of the major issues will not be effected too badly if any key personnel leaves. I find that many organisations do not insist on the creation of the SOP for all processes and they are caught with their pants down when a key personnel threatens to leave or actually leave the organisation. Sometimes the key personnel just threatens to obtain higher perks and salaries. Organisations, in my personal opinion, must not regards anyone as indispensable. What happens if a key personnel dies? Are alternatives in place? What about succession planning and execution?
The foregoing is my personal views ; views of a HR person from a developing nation.
Thank you and kind regards.
Balachandran Nair
Malaysia
October 3rd, 2009 at 8:55 am
There certainly are several schools of thought on this. I find it interesting how some companies try to invoke a ‘we are all in this together’ mentality but certainly didn’t have that ideology when times were better.
It will always come down to whatever level of job satisfaction there is for the employee versus the potential ‘greener pastures’ of something new. I do think this economy has forced many into accepting jobs and/or remuneration which previously they would not have. Accordingly, if money is that employee’s hot button, they are not likely to be satisfied until they are making what they feel they are worth. I run a national online resume company (ProRezOnline.com) and talk with several hundred professionals a week and the resounding sentiment is the same – ‘I’ll take what I have to now and prove myself. If in 6 months I am not properly compensated, I will be working just as hard at finding a company that wants to pay me what I’m worth.’ I think companies which acknowledge that stand a much better chance of retaining key people by developing a working dialogue and a providing a financial commitment to those employees. Companies which take advantage by hiring strong talent at a low ball price will see how wrong this philosophy is when the employee jumps ship and goes to a competitor – taking his/her new found information and their strong performers along as well.
October 4th, 2009 at 6:22 pm
Just published my own article with a similar topic – not to be negative but to remind managers not to be cavalier or insensitive about employees when the workplace more favors employers than employees. Employees need to be fired up to perform in any economy and great managers must care deeply about their people in any economy. When numbers matter more then people, behaviors seem to change. Numbers through people instead of numbers or people.
Here are my five:
1. You constantly told them they were lucky to have a job and made them feel desperate and not in control of their lives. You constantly reminded them of the number of out of work employees and how tough their situations are. Remind them they have no control and that they are lucky to be working and your employees will leave you.
2. You added more work to each role because some roles were eliminated. Instead of being fair about the workload with changes to compensation, time off or a promise to make things right in a better economy, you took advantage of the situation and forced the extra work on your staff (and reminded them they were lucky to have the job). Not only does this overwork your employees, but it interrupts the critical work/life balance needed to allow employees to feel successful both at work and at home. Make the workload unfair without any attempt to balance it and your employees will leave you.
3. You told your employees how things were going to be instead of presenting the tough situations and asking for their input to solve them. Employees were excluded from difficult news, or given difficult news with little time to react or respond. Successful organizations are based on open, honest and timely communication with employees; not only does this keep them informed and aware, it sets them up to participate in the challenges and opportunities of the organization. Keep them in the dark and refuse to allow for discussion and your employees will leave you.
4. You became more focused on results at the expense of the rapport and relationships you had with your people. Employees require constant contact; they require a real relationship with their managers. Managers who spend time away from their people disconnect from their people. Make your employees feel like a cog or a disposable part of the process and they will leave you.
5. You became so aware of the down times that you forgot to celebrate and make some “up times.” All employees know how critical the workplace and economy had become; it is everywhere in the news. Organizations that did nothing but worry, fret and disconnect, missed an opportunity to show their employees the best opportunities in any economy happen when the outlook is optimistic. Optimism is a choice. Organizations that find ways to be upbeat about things worth celebrating create higher performing and engaging workplaces. They weather the challenges better, becoming more successful for their approach. Make your workplace dismal and a downer and your people will leave you.
Great managers always value their employees and find ways to help them feel important even in tough times.
October 5th, 2009 at 8:45 am
Hi everyone!
I agree that employees need honest, open communication. So when managers treat the entire group with the same repor, it becomes obvious that your hard work, long hours and dedication is going unnoticed.
I wouldn’t say that management is focusing on negatives — what I can say is that they are not rocking the boat, since their retirement is in around 6 months.
At times I feel like I am throwing myself at management just to stay in the loop. All I really want is to know what’s going on and learn . I agree that Managers should involve employees in some of the decision making about cost-cutting measures, that is an area that is hush-hush around here.
Three of the good things we have is continued education and training has not been cut, we get to have a flexible schedule and no sign of layoffs.
I am counting my lucky stars right now, but that doesn’t keep me from feeling unfullfilled. :-l
October 5th, 2009 at 8:49 am
Hi G.S.,
Where can we send our resumes?
I work hard to complete my work without using OT (as requested); and yes we have all had extra duties thrown on us, but I just cannot get the monkey off my back – the one from the boss’s own mouth that said “Business is down and I am carrying everyone of you!”
What kind of way is that to talk to hard working employees? In my opinion, we are carrying HIS company, not vice-versa!
So, yes I expect this company will lose a lot of valuable people.
October 5th, 2009 at 12:36 pm
DDI just completed some research that supports this perspective and summarizes it in a article titled something like “employees in the ‘no’” – where the no refers to no raises, no incentives, no education…
Its point was that there is an attitude of stagnation because employees don’t see future, excitement, change or opportunity. And unless organizations take control of the situation and better engage their employees, then the word from employees is they are out of here when things get better.
Organizations have many things they can do from including employees in challenges to solve problems, to job sculpting their roles to reenergize employees, to developing low cost rewards for great performance. When things get tough, organizations need to step up and be tougher. Employees want and need organizations to lose the doom and gloom and find the opportunities – and include the employees in the process.
To me, this is today’s manager’s role. Step up and pull it together, or the good ones will leave.
October 5th, 2009 at 2:10 pm
I work for a small but special company with about 70 employees. I am the HR department and take employee morale very seriously. Our company has general meetings every quarter and weekly department meetings. There are smaller “breakout” meetings that happen daily when a special project is in the works for that specific department.
Employees are told just where the company stands financially and future expectations in the current economic storm. We’re pretty open about it and even took a survey to let the employees weigh in on things such as ways to cut dollars-per-man-hour and overhead. Having the employees as part of the decision making process for cutting costs means that they are already buying in to the plan before we start it. We asked our employees to help cut overhead and needless spending now so we can have our bonuses – not to mention our jobs – at the end of the year.
Our employees ARE our company and because they KNOW that, they’re confident that any cost cutting measures we do now will lead to more opportunities for growth later; for them personally and for the company as a whole. A word of caution for others who attempt this practice: MEAN WHAT YOU SAY. If the employees jump through the hoops, cut back and work harder to save the company money, the company had better make good on the promises. Failure to do so could lead to defection, disconnection or worse; the disgruntled employee.
Employees who feel they are an integral part of the company, not just another drone, are less likely to abandon ship when the seas get a little rough. There will always be the transient employees who seem to appear, do fine but change careers often, not specifically for money but because they’re searching for something they cannot find in their current career. Even perfect fitting shoes can wear out or go out of style … we can’t just give up wearing shoes.
Honesty is still the best policy for any company who wants to keep good employees.
October 14th, 2009 at 9:01 am
Economy has tanked, no overtime, no salaried workers — everyone changed to hourly (no PTO left, lost time deducted weekly), hiring freeze — more work / responsibility, minimum raises last year with small, token bonuses EXCEPT for the attorneys who received large bonuses, pay raises, and take extravagant and frequent vacations — yes, most here are looking.
October 16th, 2009 at 1:03 pm
Speculation regarding a resume tsunami or mass exodus of talent has been circulating for the past couple of months. If you look at the numbers from previous economic downturns, the loss of talent is significant.
Many organizations say they are proactive, but are really reactive. For many, the impact of a mass loss of talent will not become a reality until they start to feel the sting from high turnover.
Now is the time to reengage employees, target talent, revise succession plans, and create or revamp career progression plans for every employee. At this juncture, communication is pivotal to organizational success and the retention of talented employees.