A 25-year stay at the same company is becoming a rarity in these challenging economic times, but not at firms like Providence accounting agency Sullivan & Co. that still place a high value on staff retention.
“We have a lot of really outstanding employees,” said Jackie Waldon, firm administrator and manager. “They stay on for years … some more than a quarter of a century. The owners appreciate the employees. It’s made it a very nice place to work.”
Waldon, in her 12th year at the firm, says the company has a challenging work environment that encourages professional development and achievement.
Low staff turnover has also helped the company grow from three to more than 70 employees since it opened 35 years ago.
“The mistake [companies] make is not having a formal program in times like these because once times feel better, we’re going to see the effects of pent-up frustration on the part of employees who need better benefits and they may bolt to get them,” said David J. Wudyka, president of Westminster Associates, a human resources consulting firm in Wrentham, Mass.
That’s a warning many human resources specialists are making as predictions of an economic upturn are sparking fears among some employers that skilled workers unsatisfied at their workplace may seek opportunities elsewhere.
According to the U.S. Bureau of Labor Statistics, 1.92 million workers quit their jobs in December 2011, a 20 percent increase over December 2009. The bureau also reported a 42 percent increase in the number of available jobs in that same period.
A recent Providence Business News survey of small and large companies within the state found that nearly 87 percent of executives expect their firm’s turnover rate to increase over the next five years, and that 20 percent report their turnover rate is higher than six months ago.
Tom Wharton, managing partner of OI Partners-Lifocus Inc. in Warwick, said employers who haven’t had retention programs in place, including for professional development, are dangerously behind the times.
“Employers are pulling out all the stops to retain their talented workers in the improving job market because the talent is leaving,” Wharton said.
Mike Hanna, a partner at Sullivan and Co., said the firm didn’t consider cutting benefits as a cost-saving measure during the recession.
“We may not have hired, but we didn’t eliminate. We’re a successful firm, and you give a little and get a lot more back, so we had no problem making that commitment,” Hanna said.
Blue Cross & Blue Shield of Rhode Island takes a similar approach.
Kim Raspallo, senior talent-management consultant, said the company two years ago developed an internal course to teach employees career-management and resume-building skills.
“It [is] important for them to know that while we hope that you grow here, we want you to grow in general,” said Raspallo, who has been with Blue Cross seven years.
Sullivan and Co. and Blue Cross utilize yearlong employee-development plans that outline goals and encourage workers to seek out educational opportunities – including webinars, certifications and degree programs – which the company may reimburse.
United Way of Rhode Island operates much the same, though budgetary concerns there are sometimes greater.
Still the nonprofit, which has been recognized by PBN as one of the best places to work in Rhode Island for the past five years, has been successful in holding its professional-development program steady.
“We haven’t made any drastic changes,” said Lynn Corwin, director of human resources. “Our managers and employees have continuing conversations [on] how they want to develop, where they want to aspire to.”
In-house and low-cost, or cost-free, professional learning also counts as career and morale-boosting tools.
“We’re really focused on making sure development opportunities aren’t just seen as [sending someone] to a conference,” said John Connaughton, director of talent management at Blue Cross.
Sullivan & Co., partly to promote its family-like atmosphere, organizes lunches that match up higher-level and younger employees and other pairs who don’t typically work or socialize together.
Blue Cross works into their retention program time that allows employees to apply learning at the office and to minimize impact on personal time.
“If they’re being burnt out, they won’t be engaged and won’t be doing their job well,” Raspallo said.
Westminster Associates conducted a survey of turnover rates several years ago – pre-recession, that found approximately 70 percent of employers did not have a formal retention program.
“When we conducted [it] times weren’t good, they weren’t nearly as bad as they’ve been the last three years,” he said. “The companies that had the lowest turnover rates – 70 percent of them had formal programs.”
Informal incentives help as well.
Sullivan & Co. employees can end up working overtime and on weekends occasionally during tax season.
To compensate, the firm offers its longstanding, free “Wacky Wednesday” lunches more often.
“We’ve been trying to do a few extra things, revisit things but I don’t know that it’s so much due to the economy,” Waldon said. “We’re doing this primarily as a thank you to our employees.”
The cost of replacing skilled employees can be high.
A 2011 OI Partners-Lifocus Inc. survey found that replacing an executive or manager costs an average of 2 percent to 2.5 percent of that person’s salary in recruitment efforts, lost productivity, severance pay and training expenses.
Still, employers know not every worker is going to make their career at one company. Wharton concedes that with employee investment there is a risk of losing valuable talent and seeing those investments walk out the door.
In that case, it’s still better to have a happy employee depart than an unhappy one.
“If [they] decide to go someplace else, they’ll say good things about us when they go to that new opportunity,” Raspallo said. •
