How to retain talented employees through the economic recovery Featured

8:00pm EDT March 26, 2010

As the economy soured, so did engagement, as employees watched their workloads increase and their peers pack up their offices.

A recent study by the Corporate Leadership Council showed that employee engagement has declined steadily, in line with economic conditions, quarter by quarter from 2007 through 2009. Having an engaged work force is not simply a “nice to have” for an organization; it is critical, says Darrell Hartke, Ph.D., industrial/organizational psychologist in the St. Louis office of Aon Consulting.

“With employee engagement being positively linked to outcomes such as organizational profit, retention and job satisfaction, it is something that all organizations must manage,” says Hartke.

Organizations that manage their talent well when the economy flounders have a much better chance of emerging as industry leaders during a recovery.

Smart Business spoke with Hartke about how to engage your top talent to ensure that your company comes out on top.

What is employee engagement?

While the work environment is a critical component of employee engagement, it is the interplay between the individual and the environment that drives engagement — i.e., does the individual fit with the environment, and does the environment meet the individual’s unique needs and expectations?

In recent years, dialogue around employee engagement has exploded. Yet, when organizational leaders are asked what they mean by employee engagement, they give a multitude of responses. But engagement really is the mental, physical and emotional attachment that an employee experiences with regard to his or her work. Engaged employees are:

  • Passionate and enthusiastic about their work
  • Devoted to getting the job done right
  • Immersed fully in the task at hand
  • Focused and concentrating intensely while on the job
  • Driven to do whatever it takes to complete the task

How are leaders driving engagement?

Leaders are the people who have a disproportionate influence on the business, influencing the products and services offered, competitive positioning and the performance, satisfaction and engagement of employees. While there is no longer a leadership shortage when you look at the raw numbers of talented people in the job market, there is still a leadership shortage when it comes to finding the right leaders. Organizations take a chance when they don’t keep a pipeline of future leaders filled. If you scaled back on leadership development programs last year, revitalize them. One of the most basic practices in building pools of leadership talent is to systematically assess and develop it to ensure leaders have the skills to fit within your organization, drive employee engagement and fuel growth.

How can front-line managers engage direct reports?

Most employees don’t want to work where they aren’t wanted. With today’s organizations often facing large-scale changes such as mergers, acquisitions and divestitures, employers often ask how to keep good employees engaged and prevent them from leaving.

Some may be surprised by the degree to which front-line managers impact the engagement of the rank and file. The recovery is the perfect time to engage in straight talk with front-line managers, equipping them with messages and managerial techniques to keep employees informed and focused on a common organizational goal.

When employees receive honest information from their managers and feel heard, engagement goes up. Engagement isn’t just about the organizational environment. Employees also bring a perspective and skills that either fit — or don’t fit — an organization or role. Traditionally, organizations have focused on finding the best and brightest talent, only to sometimes have those people flounder because they didn’t fit in. Leadership experts agree that the reason that 50 percent of new executives fail is due to poor culture fit, so it is important to find people who are the right fit.

How do you help ensure that employees fit your organization?

First, if roles have changed due to restructuring, tell them what their new roles are. Communicate to prospective employees, new hires and incumbent employees the benefits of any new ways of doing business, as well as the warts associated with ever-changing roles.

Assess for fit when filling positions and make a special effort to retain employees whose attributes and abilities match the demands of the role. Research shows that job fit is associated with higher satisfaction, engagement, lower turnover and stronger job performance, making it well worth the investment.

What are the risks of disengagement?

Employees probably saw their organizations at their worst last year. Seeing friends laid off may have your ‘A’ team poised to leave when opportunities arise. Yet your ‘A’ players are mission critical. Without them, your organization can’t navigate the recovery and you will lose your competitive advantage. Your ‘A’ players own the key customer relationships, are the sources of innovation and hold irreplaceable intellectual property in their heads.

How can a company retain its best people?

Continue to invest in them and help them develop their skills. Training budgets are tight and organizations cannot afford to develop employees if there is not a direct and measurable value. To limit your costs, focus development dollars on your ‘A’ team, customize training and embed it in the work context through coaching. Research shows that the effectiveness of management training is enhanced by 50 percent when personal executive coaching accompanies it.

Darrell Hartke is an industrial/organizational psychologist in the St. Louis office of Aon Consulting. Reach him at (314) 719-3806 or