Invest in your people

A down economy is no excuse for losing good employees. Professional development is a powerful retention tool

by Spencer Shaffer

As any employer knows, finding and retaining good employees is paramount in operating a successful business. However, with relentless reports of economic doom and gloom, employers may be hesitant to invest additional funds in employee development programs. This rationale can end up costing the employer much more in the long run as a lack of interest in employee development can result in higher employee turnover. The U.S. Department of Labor calculates that it costs one-third of a new hire’s annual salary to replace him or her. These figures include money spent on recruitment, selection and training, plus costs due to decreased productivity as other employees take over other job duties.

In addition, despite the media’s attention on the economic downturn, U.S. businesses are actually growing and thriving. Add to this the 77 million baby boomers eligible to retire in two years and you begin to see that companies need to work harder than ever to keep talented employees. This notion of retention has emerged in numerous reports, including ConsultNet’s 2008 Technology Staffing Outlook.

Become a stakeholder in your employees

Countless studies have concluded that employees value an employer who invests in their professional and personal growth more than an inflated paycheck. Companies that use a pay-focused strategy end up with double the staff turnover of those that use a human capital investment approach. At ConsultNet, we’ve seen several of our clients validate these findings when they altered their employee retention approach to include a flexible work schedule. By offering 4/10 workdays or 9/80 workdays (every other Friday off), these organizations improved employee retention — with the added benefit of drawing potential employees. Bonuses and pay matter, of course, but not more than an employer that invests in work-life balance, career development and security.

Beware of burnout

Employers need to remember that their employees are people with lives and families. I like to remind my clients who are struggling to keep talented employees that they need to take special measures to ensure that their employees avoid burnout. To help avoid this situation, employers need to evaluate the workload and attitude of employees to make sure they are not disengaged from their work. This starts with communication — both formal and informal.

Err on the side of communication

Formal communication can start by having regular evaluations. This gives the employee and the employer a chance to discuss workload, expectations and review any areas of concern. Hopefully the employee will be direct about any changes they would like to see to improve his or her working situation. In addition, this provides the employer the opportunity to discuss specific ways the company can work on his or her professional development.

Informal communication is also a key to creating and sustaining a positive work environment. An example of this is an “open-door” policy, where employees are free to talk with any manager at any time. The purpose of open-door policies is to encourage open communication, feedback and discussion about any matter of importance to an employee. While some open-door policies are more effective than others, any step toward greater communication can help ensure a successful working environment.

Summary

Investing in employee development programs and working to help employees achieve a work-life balance provides big payoffs for the employer with increased productivity, knowledge, loyalty and contribution. Even though tightening purse strings might tempt you to limit or abolish employee development programs, keep in mind that progress can only result in organizations that foster learning and constant improvement.

A recognized veteran of the technology staffing industry of nearly 15 years, Spencer Shaffer joined ConsultNet in 1998 and currently serves as the company’s president. Spencer is actively involved in local charities, youth programs and is an active member of the Utah Chapter of Young President's Organization (YPO).