With the economy on the upswing and a labor shortage looming, companies must work harder at retaining talent. Here are 12 ways to make sure that employees derive fulfillment from their jobs:

Retaining talent is more imperative than ever. For companies that recognize that the caliber of their personnel is closely tied to value creation, developing a strong employee retention strategy should be a top priority. In fact, it’s not just about preventing top employees from fleeing when new opportunities arise, but setting up a process that may dictate whether the company can survive a few years down the line.

Several factors are deepening the urgency of employee retention. First of all, a labor shortage looms because of the mass retirement of baby boomers and the shrinking ranks of workers aged between 25 and 34. According to Jeff Taylor, founder of the online job marketplace, Monster, “We’ll be facing the worst labor shortage in our lifetime within the next five years.” In fact, by 2010, there could be 10 million more positions than people available to fill them, says a 2000 Bureau of Labor Statistics report. Moreover, today’s key personnel don’t expect to stay with their employers as long as they did in the past. In a recent poll of several hundred executives and managers around the country, New Hampshire-based NFI Research found that most now plan to remain with the same company for years instead of decades. And according to John A. Challenger, CEO of the Chicago-based outplacement firm Challenger, Gray & Christmas, “One recent survey (of U.S. workers) found that 34% of respondents were likely to leave their jobs once the economy improved.”

In short, companies can ill afford to assume that workers will stay because they have no other place to go. Many companies are already stepping up their employee retention efforts and discovering that the following 12 strategies work:

1) Make sure personal aspirations are not stifled. Stress flexibility, growth and development in the organization. “I think we are seeing more employees take an individual look at their jobs in the long term,” says David Sholkoff, a principal in Deloitte & Touche’s Human Capital Advisory Services practice. “They would rather remain with their current employer if career opportunities are presented. Thus, organizations that are serious about retaining key talent have a great opportunity today to create a work environment that allows for flexibility, growth and development.”

2) Recognize the key role of individual managers in employee retention. While the commitment to creating a positive work atmosphere must originate from the top, individual managers wield a huge influence on their teams’ work experiences. If managers have strong people-management and motivation skills, they can make work fulfilling, engaging and meaningful for employees, thus encouraging their loyalty.

3) Both senior executives and immediate supervisors should pose questions directly to top employees, says Sharon Jordan-Evans, who co-wrote Love ‘Em or Lose ‘Em: Getting Good People to Stay. “What can we do to keep you? What kinds of things do you want next in your career—e.g. the change to learn something new, title change? Then, listen,” she advises. “Tell the truth about what you can and cannot give right now and ask, ‘What else?’ I guarantee there will be one thing he wants that you can give.”

4) Assign work that best matches individuals’ specific interests, advises David Lewin, director of the Advanced Program in Human Resource Management at UCLA’s Anderson School. “Individuals differ greatly in this regard,” he says. “A company should exert some effort and undertake some analyses to determine the nonmonetary interests and preferences of its key employees, and then attempt to meet these preferences in action.”

5) Obtain the input of top employees on how to boost the bottom line, says Paul McDonald, executive director of Robert Half Management Resources. This will stimulate their creativity and encourage them to feel more engaged and committed to the organization.

6) Empower employees by giving them the freedom to take risks, exercise their own judgment and take responsibility for their own decisions, advises McDonald.

7) Always keep the lines of communication open, he says. “Being unavailable only sends the wrong message; no one wants to feel like they are being left in the dark or ignored. Be accessible to employees when they have questions, concerns or ideas,” he urges.

8) Consider linking managers’ variable compensation to retention rates as well as rewarding managers who help strong performers transfer to other departments within the company.

9) Conduct a company-wide employee survey to gauge employee opinion and priorities. For example, North Carolina-based Quaero, a company that designs and implements CRM solutions, is issuing a survey that asks workers what their level of agreement is with statements such as: “I expect to remain working at Quaero for at least the next two years,” and “I am paid fairly given my responsibilities and performance.” The survey also includes open-ended questions.

10) More importantly, act on survey results, addressing employee needs and concerns. “It isn’t really the conducting of surveys that promotes retention, it’s what companies do in response to what they learn that counts,” says Quaero’s HR director, David Drysdale.

11) Reward and acknowledge top performers. For example, communicate an individual’s promotion to the rest of the company and make that person feel valued and appreciated.

12) Most fundamentally, treat employees with integrity and respect. “There is no reason that companies cannot retain and/or rebuild favor among employees,” says Challenger. “We see countless examples of companies that are able to go through significant downsizings and those remaining, as well as those who were let go, still have positive feelings about the employer. It comes down to how people are treated.”

Sources:

Your New Core Strategy: Employee Retention
Paul Michelman
Harvard Business School Working Knowledge, Nov. 26, 2003
hbswk.hbs.edu/item.jhtml?id=3803&t=organizations

Company Longevity Has a New Short Life
Chuck Martin
Darwin Magazine, October 2003
www.darwinmag.com/read/100103/longevity.html