Top Retention Strategies for the Impending Economic Recovery

Top Retention Strategies for the Impending Economic Recovery

by Deanna Hartley

Even though many pundits are heralding the onset of an economic revival, employers cannot afford to sit back and breathe a sigh of relief - especially considering their No. 1 asset may be getting ready to walk out the door.

"It's very hard to call the bottom of a recession, [but] more executives today think that we can see the bottom from here," said Jeff Schwartz, partner with Deloitte Consulting and global and U.S. leader of talent services. "When executives think the bottom is close, they start thinking about what to do next, which is preparing for and thinking about the recovery."

One of the biggest concerns among employers is the unusually high turnover rate expected to prevail as companies begin to emerge from the recession - and this problem will be particularly acute in the case of millennials..

"Gen Y is much less loyal - there's not the sense of being a long-term employee; they think of themselves more as independent contractors and [are] very much focused on their own careers," said Robin Erickson, manager at Deloitte Consulting. "They're very willing to job hop if they find there may be something better out there."

Experts say it won't be an easy task to try to convince this demographic to stay. "Part of what we're seeing in the very high numbers of the expected turnover of millennials is that there's real uncertainty as to what new generations of workers are looking for and what combination of compensation, meaningful work, workforce flexibility [and] challenge in their assignments [they desire]," Schwartz said.

These findings should prompt employers to be proactive and implement effective retention strategies before it's too late. "If [employers] haven't started thinking deliberately about retention programs and talent programs for the recovery, [they] should - they can't start soon enough," Schwartz said.

A recent survey conducted by Deloitte outlined what executives view as the most effective retention initiatives for each of the four generations that comprise today's workforce. According to executives, younger workers prefer additional compensation as well as bonuses or other financial incentives, whereas older workers would respond favorably to benefits, such as health care and pensions.

Further, there are some nonfinancial incentives - or "intangibles," as Schwartz refers to them - that also can play a role in retaining employees - millennials, in particular.

"One of the challenges right now, as companies are hunkering down, is that some employees feel like they're not getting the opportunity to try new things and to spread their wings in new areas - this is particularly important to young workers," Schwartz said.

"An increasingly common organizational challenge across different generations of workers is accommodating their desire for nonlinear careers - i.e., climbing the corporate ladder," he said. "It's also important to offer careers in which they can move laterally within the organization and try different things."

Research also shows millennials try to find jobs that are meaningful, Erickson explained. "We are seeing linkages with enterprise sustainability efforts and initiatives - [when] a company has a strong 'green' employer brand or value proposition - that's significant to Gen Y," she said.

Moreover, employers must have a clear view of why a high performer would join and stay with their company, Schwartz explained.

"Some of that equation is about money [or] the kind of work people do; a lot of it is about the way people are treated, workforce flexibility and the ability to try [their hand at] different things in an organization," he said.

[About the Author: Deanna Hartley is an associate editor for Talent Management magazine.]