2010
Is it time to focus on employee retention again?
With the unemployment rate hovering at the highest level in 26 years it’s hard to imagine that any company would be focusing on employee retention. However, according to a recent Wall Street Journal article, 60 percent of working Americans plan to switch jobs when the market improves. Over the last several years, companies have continued to decrease their labor force in order to save money resulting in an increased work load, extra hours at the office and less vacation time for the employees left behind. As the market begins to improve and jobs openings become more common, there will be significant movement in the labor market as employees make (often long-delayed) job changes.
Prudent companies are already positioning themselves to mitigate these future losses as much as possible. Companies ranging from Wal-Mart to a small maid service in Ohio are taking steps to increase employee satisfaction while also driving business results. Wal-Mart, the largest private employer of Americans, is set to launch a $50 million tuition assistance program for full-time employees who have worked at Wal-Mart for over a year (or part-time employees who have worked there for three years).
My Maid Service, based in Lebanon, Ohio, is following a similar strategy with a twist. In order to increase retention they are paying for their workers to go to school in any field they choose. In essence, they are training their employees to move on to other careers. While this might seem counterintuitive, turnover at the small company dropped from 300 percent in 2007 to zero in 2009. This has not only reduced the company’s overhead expenses but it has also increased customer satisfaction. Customers were becoming increasingly uncomfortable with the constant turnover and unfamiliar employees having access to their homes. Although the owner expects attrition to pick up next year when his first crop of employees graduate, he believes this process will help him retain new employees.
The Bureau of Labor Statistics recorded more resignations than layoffs in February for the first time in 15 months. As the market continues to thaw, the number of resignations will grow as overworked and underpaid employees begin seeking other employment. In order to save money and retain the best possible workforce, companies would be well advised to head these market signals and begin taking action now.
Tagged employee retention, tuition assistance