How a company handles its employees during a challenging economy will determine how well the company can retain its key employees. "While, in general, employees' attitudes will decline in uncertain economic times, there are major exceptions, depending on how management treats workers," said Douglas Klein, President of Sirota Survey Intelligence. "Businesses need to manage through this uncertainty and these business cycles -- rather than from within them. They need to adopt strategies -- before negative business events occur -- that will mitigate the impact of uncertainty on employees. Employers need to avoid managing people as expense items in the budget so they can retain workers when times are good -- and employees have more career options available to them."
Companies should take the following steps to formulate a resiliency strategy for difficult economic times:
- Do pay more attention to high-potential employees, who are most likely to leave during difficult times. "Even in a tough economy, high-potential employees have other opportunities," Klein said. "Consider developing a retention strategy for high-potentials that includes a strong focus on career development. Give them special projects to meet their achievement needs, and make sure they are taking advantage of training and development opportunities."
- Do build a "partnership culture." According to Sirota's research, companies with a "partnership culture" consistently outperform their competitors during both boom times and downturns. A partnership culture is characterized by 12 hallmarks, including basic trust, a long-term perspective, joint decision-making, open communications, financial sharing, and equitable day-to-day treatment. "These values need to be followed on a daily basis, particularly during challenging times, in order for a partnership culture to work," said Klein.
- Do create ways for all employees to contribute to the company's efficiency and effectiveness goals. "One excellent mechanism is gain-sharing efforts," Klein said. "As the name says, it is a method for sharing gains with employees -- the gains that employees themselves achieve for the organization. These programs are very motivating and truly exemplify a partnership culture."
- Do focus on the local behavior of immediate supervisors and managers. "Simple management behaviors such as giving timely recognition to employees, supporting their continued development, and providing coaching and guidance, mean a lot to employees -- especially when they are anxious," Klein said. "During these times, it is even more important to be consistent between words and actions, and to create an environment where everyone is respected. These leaders and managers should receive guidance in how to understand their own -- and their subordinates' -- reactions to stress, and how to develop coping strategies."
- Don't stop performing periodic employee assessments. "Companies need to assess how anxious their employees and leaders are feeling about internal and external issues, and how well their culture and management practices are buffering," said Klein. "Monitor workers' stress levels, their perceptions of their workloads, and be on the lookout for burnout," added Klein.
- Do create, communicate, and then exhaust "rings of defense" before downsizing. "An employer that treats its employees as true partners makes every effort to avoid layoffs," Klein said. "Believe it or not, you will even find people willing to participate in arrangements for their own 'funerals.' The key is employees having trust in management -- that they feel management is being absolutely open and honest, and is doing everything it can to cushion the blow. When it does become necessary to reduce costs, many steps can be taken as an alternative to involuntary layoffs. These are known as 'rings of defense.'"