Preventing the exodus Featured

7:00pm EDT January 26, 2010

Week after uncomfortable week, Donald Trump leaned across the edge of his famous boardroom table, his hands locked together, his lips curled in a sneer, and stared some poor sucker right out the door. During eight seasons of his reality television show, “The Apprentice,” Trump has mastered the ability to pound out the two words that no employee, not even a contestant eager for fame and fortune, wants to hear.

You’re fired.

As has been the case so many times during the last couple of decades, Trump proved to be far ahead of the curve. He mastered the fine art of the fire long prior to the start of our current recession, long prior to millions of workers hearing the same words, more or less, as that unfortunate contestant on the other side of the table. But perhaps Trump — and you — will not need to utter those words as often this year as you did last year.

The national unemployment rate dropped to 10 percent in November 2009 from 10.2 percent in October, according to the Bureau of Labor Statistics. That figure, however slight, represents enough of a drop to provide some glimmer of hope to human resources and human capital experts across the nation and some hope that the start of a long recovery will soon be under way.

“This is providing an opportunity to step back, re-evaluate and reset the human capital agenda,” says Jan Rose, market business leader for human capital, Mercer LLC. “Everything is up for examination. Many of our clients are reviewing the effectiveness of all their human resources programs and assessing whether the programs are having the effect they want it to have for their investment.”

All of which means that, after a long and frustrating year filled with layoffs, wage freezes, the elimination of bonuses and perks, and the addition of more assignments for employees already under stress, the economy — and the human resources industry — might start to take a turn for the better at some point this year. Challenges do remain, of course, but there is hope.

Whenever the figures and charts tick upward, the time to move will be as soon as possible. Will you be prepared?

Focus on your top employees

The challenges throughout the last year focused on how to maintain the revenue, trim the budget and retain as many employees as possible. Almost every business of every size lost something and, more important, somebody — as evidenced by that aforementioned unemployment rate, which has increased during almost every month since April 2008.

You might still need to trim your budget, but you will also need to focus on identifying and retaining your high-performance and high-potential employees. So often, those employees might think the grass is greener on the other side of the proverbial fence. But what about when the grass is brown? What about when there is no grass? Heck, forget the grass, what about when there is no fence? They remain where they are for as long as necessary, as they are doing now because there are so few available positions in the marketplace.

Then they leave.

That is, at least, the consensus among dozens of human resources and human capital experts.

“Everybody recognizes that you need to be careful about expenses in this kind of economy,” says Bruce Barge, market leader and principal, Buck Consultants LLC. “But don’t cut your spending on innovation, don’t cut your spending on the kinds of training that allow people to develop the sort of skills that grow the company, don’t hire people who are just average because that’s about all you think you can afford. People pay attention to that and to the message from leadership.”

The process of retaining those high-performance and high-potential employees has already started, with your top workers likely influenced by how you handled the fallout from the shock of the recession. If you handled layoffs with dignity, communicating why decisions were made and what they meant for the future, that helped — so did any revenue investment in those top workers, from compensation and bonuses to training programs and seminars. And if you talked with those top workers and relayed to them where they fit in the vision for your business, that would have been about the best thing you could have done.

“One thing we’re beginning to understand that is really important, perhaps the most important thing, is to have employees feel connected to their sense of purpose in the organization,” Barge says. “There’s more and more research showing that’s the most important motivator. Not that compensation and other more traditional motivators aren’t important, but what really matters, especially for your highest-performing employees, is that sense of purpose. They want to feel like what they do makes a difference.”

Develop and share your plan

In addition to identifying and targeting your high-performance and high-potential employees to prepare for a future of healthy economics, you should develop a plan to address possible human resources challenges and plot the path you want your business to follow during the next couple of years.

Chief among your objectives for that plan should be the development of a balance between continued cost reduction and simultaneously positioning for growth. During the last year, many companies have aimed to manage and contain all costs related to human resources and human capital because they have been trying to do little more than survive. Survival is important, but it is also important to not damage the viability of your business in the big picture, well beyond these few years and even beyond this new decade.

Once you develop your plan, share it with your employees, especially your key employees. That advice might sound obvious, but experts say that too many business owners fail to relay information to their managers and their employees. And even in a good environment, employees who only hear about meetings behind closed doors and have no idea what is happening — and what is about to happen — will often speculate incorrectly, either causing additional stress or inadvertently spreading incorrect information. In short, you can still have those meetings behind closed doors, just be sure to share what is said on the other side of the oak.

“Business is driven by entrepreneurial people, not necessarily management, and although it seems logical, communication sometimes falls by the wayside because they’re going at a rapid pace and that tends to fall to the backburner,” says Mistee Torres, director of human capital consulting for Southern California, TriNet Group Inc. “Especially in this economy, it is really important to make sure employees know where the business is — because people already have a heightened awareness of their future and where they stand in the business.”

Communication is a key to developing a successful human resources department, either internally or by bringing in an outside firm. You want your employees aware of what is happening in your business, and you want them to be engaged.

“Motivating employees is key for employers now, especially because employees need to realize that what they do affects the overall success of the organization,” Torres says. “Keeping people motivated is important, especially during a time like this.”