ExecuNet – Few Companies Have Retention Plans For Economic Uptick

From the February 2010 ExecuNet Newsletter

While nearly half of responding employers acknowledge the economic downturn has slowed the drain of employees, that doesn't mean they are effectively positioned or planning to retain their top performers when the economy and jobs market improve.

A study by the Institute for Corporate Productivity finds that 47 percent of polled organizations say the current economic doldrums have had a "somewhat" or "significant" positive effect on employee retention. However, when asked what will happen when the economy rebounds, only 46 percent of companies say they are concerned about retention to a "high" or "very high" extent.

When it comes to trying to keep employees on-board when the economy improves, just 20 percent of organizations report they have increased their retention efforts. However, among higher-performing companies, 27 percent indicate retention efforts have increased, compared to 17 percent of lower-performing performers.

Regarding a budget for retention efforts, 23 percent of companies overall admit they don't have one, while 43 percent say their budgets have remained about the same. Twenty percent of higher performers said they don't have a retention budget, while 25 percent of lower performers revealed they do not have one.

In addition, when employees do leave, the study suggested that many companies may be missing the "why" retention boat. For instance, 68 percent of companies overall conduct face-to-face exit interviews to learn what led employees to leave the organization, but only 17 percent take action to address those issues from a "high" to "very high" extent.

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