Acknowledging, rewarding good work goes long way in retaining top employees

The economy’s rough. Colorado’s unemployment rate inched into 5.7 percent territory in February, and the stream of potential new employees runs fast and fresh. No sense, then, in worrying about keeping your best workers satisfied and loyal, right?

“That is an absolute fallacy,´ said Peter Svenneby, a principal at Svenneby Corp., a Foxfield technical recruiting firm. “That this is a bad time so there is no place for anyone to go, is absolutely untrue. There are always companies in their state of development where they are adding employees.

“Many of my clients are saying they are not going to look at people who are unemployed. They will only look at people who are succeeding at their current company,´ said Svenneby, who recruits sales and marketing teams for high-tech firms nationwide.

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“Your key employee is on that list,” he said.

The cost of losing a top employee is high — perhaps as much as 50 percent of the person’s annual salary, more if you take into consideration the effect turnover has on customer satisfaction. And more still if you account for the brain damage of picking the needle from the haystack of unqualified candidates.

“That number is huge,´ said Stephen Meer, chief technology officer and co-founder of Intrado Inc. in Boulder. “Obviously, we strive not to have turnover. People, of course, leave any organization.?

The trick is to reduce it by developing a workplace that engenders loyalty, said Superior resident L. Bonita Patterson. Patterson is vice president of Executive Forum, an Englewood organizational development and consulting firm.

“You can offer programs like flex time, and be sensitive to employee needs, but programs are not the things that are going to do it,” she said. “Management attention to the workforce and to the culture is the key.”

This starts at the beginning of the employee-employer relationship, maybe even before, she said. “Managers need to start thinking about retention before they hire people.

“You really need to hire people who want to improve and are interested in continual growth,” she said.

Assuming you’ve made a good hire, Patterson said, the first week on the job can set the tone for the rest of a person’s tenure. “You need a process in which you make a concerted effort to start showing people you value them from the beginning.”

This means not just dumping a pile of orientation manuals on the worker’s desk and hoping for the best. “Loyalty comes when they watch how an organization treats people,” Patterson said.

Managers should provide challenging opportunities and allow workers the chance to change jobs within the company. Understand that if they do move to a different department, they will gain different, useful perspectives on the business. It also helps if the work is meaningful.

“I think the reality is, people like to have a fulfilling career that has meaning. It’s not just the money and the de rigueur employee benefits,” Intrado’s Meer said.

Lynne Brenner, director of human resources for New Hope Natural Media in Boulder, said she prefers to see a good employee transfer to a different department than leave the company.

“We try to promote and move people within New Hope,” Brenner said. “It’s hard to find good people, and we’ve worked hard to develop a special culture here. If we lose that, we’ve lost something far more important than the skills the employee has.”

Patterson suggests making sure lower level workers are coached and mentored the same way the executive team is. And make sure you’re providing feedback on a frequent, regular basis.

Information sharing is also critical. “Don’t just ask, share about what is going on so your workers are not in a vacuum, so they have a better understanding about how decisions are made, what factors are considered and weighed, what’s going on and how they are perceived,” Patterson said.

Meer and Intrado co-founder George Heinrichs have worked hard to create a workplace where employees don’t have to worry about making mistakes and confessing them. “It’s safe to be the messenger about what’s going on,” Meer said. “You may have had made a mistake with disastrous consequences, but we’ve fostered an environment where it’s OK to do that. You’re going to be in trouble if you do it over and over again, or if you don’t bring it to us.”

That trusting environment has allowed Intrado to be more agile. Meer said the company recently divided into business units, but because of excellent communication, the project was completed without missing a beat. “In the course of one business day, we realigned the company,” he said. “But because we communicated with every employee, business went on, and no one even felt a ripple.”

It’s when you don’t communicate that the ripples turn into tsunami, which can be especially dangerous in rocky times.

“Everybody is going to know, they just won’t know what they know,” Patterson said. “You might as well tell people what is up: We’re in this financial situation, and we’re trying to work our way out of it. This is what we’re going to do so we don’t have to lay people off. But down the road, we may have to.”

Employees who have been burned at other companies are quick to divine any news as bad news. “You’ve got to control the rumor mill, or the result could be devastating,” Svenneby said. “Disclose something; do it under non-disclosure if you have to.”

If things get so bad that there are deep budget cuts or layoffs, it’s even more critical to manage the work environment — one bad move and you’ve given your workforce permission to jump ship.

“Good employees are going to know if the company is doing well. If you think the company is still viable, make sure you sell them on that,” Svenneby said. “If they get the feeling the company is no longer viable, they’re going to start listening to some of these recruiters.”

Svenneby also said it’s key to make sure you live up to your promises – especially the financial ones. If you’ve promised a bonus or commission check, make sure the worker gets it. If you’re having cash-flow problems, call the employee in and explain why they’re not getting their compensation on time and set a date for when they will be paid. “Don’t cheat your best employees,” Svenneby said. “That’s a terminal offense.”

Be mindful of the human capital cost of running a leaner company, advises New Hope’s Brenner. “It’s tough when people are already being stretched,” she said.

The little things help, though.

When there were no bonuses to hand out this holiday season, New Hope shut down between Christmas and New Year’s, which gave employees an extra paid week of vacation. “We don’t have a lot of extra money, obviously, or we wouldn’t have had to let people go,” Brenner said. “But there are some inexpensive ways to celebrate the people who still are here.”