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An Improving Economy Could Mean Loss of Employees. Will They Stay or Will They Go?

When accounting for the costs (both real costs, such as time taken to select and recruit a replacement, and also opportunity costs, such as lost productivity), the cost of employee turnover to organizations has been estimated to be up to 150% of the employees’ remuneration package. In the case of the public sector can, or should, the taxpayer have to afford that?

The US economy is improving. This is a good thing for organizations, agencies and job seekers alike, though it’s also positive news for employees – employees who may have felt over worked and under-appreciated during the downturn – and that includes government workers (though the ‘squeeze’ for them seems to still be ongoing).

Should you be concerned about retention and loss of employees?

Though employee engagement and retention should always be a focus for any high performing organization, additional focus should be placed on retention strategies during an economic uptick. When employees see external environmental factors such as the economy improving, and more opportunities available to them, organizations have to work harder than ever before to retain good talent. Many employees are willing to put up with job dissatisfaction during hard economic times for fear of losing their job and or not being able to find an alternative. Though an economic uptick is not a guaranteed sign that employees will jump ship, it is a contributory factor many consider when making a job change.

Though average employee tenure varies by industry, work type and demographic; however, the days of long term tenure with an agency or organization are not what they used to be. Under stable economic conditions, it’s not uncommon for people to move jobs every few years. Factor in opportunities for new jobs presenting themselves, after years of stagnant wages and often increased workload and minimal recognition, and suddenly employee retention can become a serious issue.

“We are responsible for our own lives–no other person is or even can be.”
~Oprah Winfrey

It’s not just a poor economy that can lead to dissatisfied employees counting the days until their next opportunity. Many attributes of organizational culture, as well as leadership and management behaviors, contribute to employee dissatisfaction. Many of these attributes often tend to become enhanced and accepted in times of distress. However, as the economy improves, employee tolerance for many of these behaviors declines. As opportunities arise for employees to change jobs; these other non economic attributes that play a part in retention need to be reevaluated or addressed – particularly in sectors that don’t always pay attention to such details such as government.

Organizational Behaviors Negatively Impacting Employee Retention:

  • Lack of honest and transparent leadership
  • Poor communication top down, bottom up, and lateral
  • Inflexible and un adaptable strategy
  • Reduction in employee growth opportunities
  • Unachievable performance goals
  • Lack of recognition
  • Reduced or non timely and relevant job training
  • Minimal appreciation for diversity
  • Non merit based pay
  • Culture of distrust

I often get told “we can’t afford to keep our employees by offering higher pay and benefits.” Sometimes an increase in salary and benefits is not a feasible solution to employee retention, particularly after several years of tough economic times. Now sure, will you lose some employees strictly due to salary and monitory benefits, of course. That said, you’d be surprised how understanding employees are willing to be if you show them you value them in other ways. That’s not to say money isn’t a driver for many people, though it certainly isn’t the only one.

So when options present themselves for employees to leave, what should you do to ensure you retain them, and the costly institutional knowledge they possess?

Organizational Behaviors Positively Impacting Employee Retention:

  • Increase leadership honesty and transparency
  • Reevaluate and ramp up organizational communications
  • Revisit your strategy and targets
  • Don’t reduce employee growth opportunities
  • Have realistic performance goals
  • Recognize, recognize, recognize!
  • Provide training and learning opportunities
  • Value and respect diversity
  • Have merit based pay systems
  • Create a culture of trust

    *For further details and actions regarding these behaviors see our

    Employee Retention Checklist: Organizational Behaviors That Positively Impact Retention

With the economy making a turn for the better, it’s largely up to you whether you make your employees want to stay or go. Do you have employee retention strategies in place? If so, have you revisited your engagement and retention strategies recently? How does your agency or office compete with the private sector? Tolero Solutions can help you increase retention and engagement and design strategies best suited for your organization. With an estimated cost to replace an employee of up to 150% of the employees’ remuneration package – can you – and the taxpayer – afford not to focus on retention?
“The employer generally gets the employees he deserves.~Walter Gilbey

About Scott Span, MSOD: is President of Tolero Solutions Organizational Development & Change Management firm. He helps clients be more responsive, focused and effective to facilitate sustainable growth.

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Corey McCarren

Improve culture. Maybe create a telecommuting policy to show employees you trust that they will get their work done, and to offset the inability to get a salary increase, let them save some gas money.

Scott Span

Well Corey, no argument from me. Though it took the government a long time to approve telework, they now have policies in place…though not mandated for all agencies.

Allison Primack

This is what some excerpts of people have been saying on GovLoop’s Facebook when asked what employers can do to retain talent as the economy improves and other opportunities become available:

Henry J Ceslewski JrNOT ship jobs out of the country for the benefit of Obama’s bankster buddies. SIEZE the assets of the privately owned “Federal Reserve Bank” sooner than later and see how quick the economy rebounds…”

Kevin Schaferloving them and actually listening to them when the time is not necessarily right for you… Who knows… You might actually learn something… :)”

Iris MarsPay them!”

Scott Span

Ok..thanks, Allison. Well those folks are more than welcome to join the discussion and share their thoughts in reference to this post.