Thursday, June 24, 2010

Are Leaders Ignoring the Looming Employee Turnover?

I spend hours every day reading blogs about human resources and employee benefits. I know that there's a lot of general hand-wringing by professionals in these fields about about what's going to happen when the economy gets strong enough that employees start looking for jobs elsewhere.

These pros know that many workers are burned out -- and sometimes just plain pissed off -- because they've been working like dogs for more than a year without a break. They're looking for a breath of fresh air -- and they believe that might only be found at another employer. Here's the story I did for on the issue and what employers should be doing (besides wringing their hands):

While the improving economy is good news for everyone, there is a slight nervousness by employers asking themselves a difficult question: Will there be a mass exodus of workers once they see greener grass elsewhere?

The recession prompted many workplaces to slash their workforce, resulting in the remaining workers being saddled with more responsibilities – often without extra compensation. In some cases, employees took on more work while having their pay or benefits cut.

So as business conditions improve, there is a real concern that these key workers – who have kept employers thriving in tough times – will jump at the chance to start fresh somewhere else.

Retaining key workers could be a problem not only because workers feel overwhelmed, but because there is a lingering sense of discontent in many companies about the way leadership operates. For example, a recent Right Management survey found 19 percent of employees “rarely” trust their managers to make the best decisions.

“There is a bit of fear on the horizon that as we come out of this recession those employees who have been mistreated – we will see the loss of those people,” says Dave Ulrich, a University of Michigan business professor. “We think there’s a real crisis around employee engagement.”

Wendy Ulrich, a psychologist and Dave’s wife, says that in the last year many employees have been grateful to have a job – no matter the conditions. But that attitude probably will start to change as the economy improves and more workers begin to look for something more in their jobs. She says that many will search for “meaning” and for company cultures that show appreciation and respect for their work. If they can’t find that in current positions, she says, it could lead them to look for jobs elsewhere.

In Dave and Wendy’s Ulrich’s new book, “The Why of Work”, (McGraw-Hill, $27.95), the authors say that while there is fear within some companies about employees jumping ship at a critical time, this concern isn’t necessarily felt by the upper ranks. They say that many top leaders are ignoring the issue, which is why in their book they seek to point out that the lack of employee engagement can have bottom-line consequences for businesses.

For example, they say that from 1998 to 2008, the “best companies to work for” had a 6.8 percent stock appreciation compared to 1 percent for a typical company. Disengaged employees, they point out, are 10 times more likely to quit their jobs within a year. “If you don’t engage people’s hearts and souls, they’re going to go elsewhere,” Wendy Ulrich says.

She argues that these kinds of numbers prove that leaders can’t use old-school management practices any more if they want to compete in a global marketplace. “A lot of us are used to management by control and demand. But the carrot and the stick only go so far,” she says. “When people are in jobs they don’t like, they are going to be giving less than their best effort. They’re going to just be going through the motions, and they’ll be less productive.”

Dave Ulrich says that as people spend more time at work, they seem to be seeking more meaning in their jobs, a message which employers must heed if they want to survive. “If employees find meaning in what they do, they can tell themselves that yes, it’s hard; yes, it’s work; but they have found meaning.”

The authors say it’s time that employers begin a new phase of how they operate, one that relies on engaging workers as partners and collaborators to achieve success for both the company and for individuals. They say that to help employees find meaning in their work, employers should take steps, such as:

  1. Helping employees develop and use abilities they consider important, such as leadership, integrity and kindness.
  2. Enabling them to understand how their efforts directly impact something they care about. For example, leaders could let workers know how the production of widgets is then used to build products that help the environment.
  3. Promoting a positive work environment by displaying kindness, humility and civility.

“The companies that convey a sense of meaning and purpose to their workers will win,” Wendy Ulrich says. “This is an economic gain, not an emotional gain.”

What else should employers be doing to retain workers?


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