I was reading an article on a trade website with a reminder for human resource professionals that 2014 will be the year of retention. With the economy improving, a key indicator is people will begin to move from their current job. The article touched on this, but did not say it as directly as I will now – employee loyalty to an employer has been broken, and the employer need only look in the mirror for the reason. We are now a workforce of free agents.
This has been a trend since the turn of the century, but the recession put the final nails in this coffin. Real wage growth for the average Joes and Josephines has been pretty stagnant for some time, even before the recession. Coupling that with continual downsizing and employees have become dispirited. Especially, when they saw colleagues sometimes walked to the door the same day (or hour) they were let go. And, for those in other offices or locations, you did not hear that Betty or Steve were let go, as the company did not want to send out a widespread information release saying they just let the following 250 people go. So, you found out through the grapevine.
I worked for a company that had about twenty-five reductions in force over a fourteen year period that I was there. Some were small, some were in a different lines of business, but they occurred with agonizing routine. Oftentimes, the cuts were done around salary increase time, so they would not have to give a miniscule raise to someone. The reasons varied. This area is not growing fast enough. This idea did not work out as the leaders who sold it have left and now you must. We bought this company and now we have to find savings in other areas as we promised the old headquarter city we would need not cut too many there. We have a tight budget on salaries, so we need to cut the higher paid people who are on the downward side of their greater success (they would never say this, but this was a key reason).
The downsizings got more pronounced during the recession. Plus, other cutbacks occurred such as 401(k) plan employer matching contributions, greater healthcare plan cost sharing, training budgets and salary freezes. Yet, how these changes are communicated and executed matter a great deal. The companies that are more forthcoming and share information behind the causes benefit from a more understanding workforce. These tend to be companies who value employees more in the first place.
Yet, employees see how others were treated. When they see a pretty darn good employee get walked out the door, they have three reactions. One, they are sorry for the person. Two, they feel the company should not treat the terminated employee like that after twenty years of service. Third, they think that they could be next. Then, they put their resumes together and get their financial house in order. They start networking more, little by little. They have officially begun the disengagement process, whether they end up leaving or not.
Having to make cuts is one thing. But, doing it in the manner it has been done by so many, is poor form. One of the more depressing movies I have ever seen is “Up in the Air” with George Clooney. In essence, he worked for an outsourced firm who fired people for the company. In other words, the company needing to downsize hired another firm to fire its people. As a HR professional and consultant, this movie offended me. These are human beings for Christ sake.
So, this will be the year of retention. HR will be looked at to solve the puzzle. Why are they leaving and what can we do about it? Well, for starters you can reread the last line of the preceding paragraph. How you treat people matters. And, for the most part, employers have treated their employees with less dignity and respect. The employers have broken the loyalty of their people. Your employees see this and they remember.