How confident are you that your best performers will still be with you a year from now? The economic landscape may be changing in a way that will challenge employers.
The good news is that there are some encouraging signs that we may be approaching the end of the recession. About time. It has been an ugly and painful time for many firms.
As a consultant, I have watched as organizations chopped salary budgets; froze salaries; reduced salaries; eliminated bonuses; stopped 401 (k) matches; and implemented a host of other cost cutting measures. This has been in addition to layoffs and furloughs. It has not been a happy time.
But in the not so distant future, I believe, the situation will begin to turn and employers will be faced with another and very different challenge: attrition.
You might be thinking this is a strange time to be worrying about attrition, but I can assure you it is not. As the economy recovers and job opportunities expand, the temporary factors that have kept employees bound to their present employers may very well begin to weaken.
If that happens, don’t be surprised if attrition rises. The cost cutting actions described above have been traumatic for many employees and they may believe that the grass is greener elsewhere.
How should employers respond?
My advice to you is this: don’t wait until the environment has already changed. By then it will be too late.
Now is the time for employers to begin to prepare for the new reality. While compensation and benefits aren’t the only important factors in retaining employees, they are critical ones, especially since many of the cost cutting measures taken in the last year have been compensation or benefits related.
Now is the perfect time for your organization to step back and revisit your approach to compensation and benefits. Questions that can be addressed include:
- How can we most effectively use our limited compensation and benefits dollars?
- Does our compensation/benefits philosophy match our company culture and the realities of our business?
- What do our employees value most in their compensation and benefits program?
- On which issues should we follow market trends and on which should we blaze our own trail?
- How can we most effectively communicate our decisions to staff so that they understand the process and recognize the trade offs that necessarily must be made?
Remember–the successful company is one that can anticipate the future and respond accordingly before its competitors do.
No one knows when the attrition wave will begin to surge. It may be 2010. It may be 2011. But it is coming.
Invest time now to address these questions and you will be in a strong position when your competitors are still trying to figure out why their employees are heading for the exits.
