When the going gets tough, hold on to your staff

Tough times call for tough measures, and this becomes more evident in a challenging economic scenario where organisations need to manage budgets, cut costs and strive to remain profitable. Unfortunately, the common knee jerk reaction during troubled financial scenarios is to announce an “across-the-board” laying off of employees. Add to this employee attrition due to uncertainty and insecurity, and businesses begin to lose their key driving force — good employees.

In difficult economic conditions leaders at most organisations instruct their HR team to “manage” challenging times by cutting costs, up-skilling managers, identifying employees for redundancy and not making efforts to control attrition. They are asked to meet the short-term demands of quickly reducing headcount and other variable costs.

However, it is during such financial crises that businesses have to build an integrated approach to talent management, connect their recruitment, motivation and retention processes and position themselves for future opportunities. Employee attrition should become a concern, not a blessing, for every HR leader during economic crises.

Organisations can end up losing best employees with no hope of getting them back when things improve. Since a company usually invests a lot of time and resources into training and developing employee skills, when an employee leaves the company not only does it impact the business immediately, it also throws the team into uncertainty about getting the right replacement.

HR leaders need to remember that in a business it is the people who are the key competitive differentiators. The trick is to build a solid retention strategy and continue to hire good talent regardless of economic conditions. Here are some reasons why HR managers must retain good talent:

a) Rising employee burnout and turnover reduce productivity and morale.

b) Tough situations usually result in no new initiatives resulting in stagnation and lack of motivation.

c) Replacing employees who have been downsized or have left the organisation on their own could take ages to achieve; besides the cost of replacing existing employees is high and is estimated to be as much as twice the individual’s annual salary.

d) Wastage of resources spent in training and enhancing skills.

e) High attrition, especially of employees involved directly in business operations, does affect company performance and even customer relationships.

f) Lack of business continuity due to absence of knowledge.

g) Low morale and disturbance within existing employees.

h) Bringing a new employee to the same knowledge level takes a lot of time, putting a lot of pressure on the team in the meantime.

Effective employee retention means fostering an environment that encourages employees to stay committed by implementing practices that address their diverse needs. We present some simple yet effective techniques of employee retention:

Respect is critical for employee retention. Respect their skills, their personal life and their ability to make a difference to the company.

Recognition of employee needs and appreciation of employee effort can make a lot of difference to employee morale and help build loyalty. Appreciation can be expressed in meetings, or via emails, company newsletters and other such means.

Rewards are that something extra that assure employees that their effort is being appreciated and also gives them public recognition.

Fear of the unknown and insecurity lowers morale. Regular, consistent and open communication (even when it’s bad news) is important.

Regular employee events, unexpected days off, occasional relaxed dress codes and other such small gestures help with employee satisfaction and build a comfortable work environment.

Empower employees to do their job well by giving them everything they need in order to complete their job.

Identify opportunities to improve employee efficiency and build a strong leadership to mentor and guide employees.

An economic slowdown, instead of resulting in employee attrition or laying off, can conversely serve as an opportunity for organizations to change their strategy towards employees. It encourages HR teams to take a more intelligent, fact-based approach to understanding their current and future talent requirements. This is a chance for HR leaders to drive the mandate for overall workforce and work environment transformation. They can use slow business times to build a culture of better quality of work, improved customer service and encourage greater efficiency and effectiveness. Instead of ‘trimming the fat’ during a downturn, organisations can ask employees to stay motivated and put in the extra effort required to survive the slow business period. Obviously, to achieve this level of motivation, employees need to trust their leaders and the organisation.

(The author is a Senior Vice-President, Talent Management at ITC Infotech.)