November 2000

November, 2000

"Jack Just Resigned." Now What?

Here's a sobering thought. Many, if not most, of your organization’s new employees do not expect to be on board in another five years. Part of today’s more transient workforce, they tend to view themselves as free agents in search of ever-greater challenges, compensation and opportunities for personal growth. Moreover, since few expect their employers anymore to give them a job for life, most don’t seek one. As a result, managers increasingly manage employees who someday will come in and quit.

Most of them will be the “keepers” whom you had hoped not to lose – as opposed to ones you had contemplated firing for the past six months. To make matters worse, they inevitably will resign at the wrong time, in the midst of an important project and/or with no evident replacement at hand. In a lot of companies, unexpected resignations are a time for great weeping and gnashing of teeth: “The so-and-so deserted us. Now what are we supposed to do?” Surely there has to be a better way.

What’s Happened to Employees Lately

In a recent Louis Harris & Associates study conducted for Spherion Corporation, researchers identified two types of employees. “Traditional workers” value job security, stability and being told what to do; in their view, pay should be tied to seniority on the job. By contrast, “emergent workers” value career security (which they themselves create), thrive on chaos and want to make the rules; in their view, pay should be tied to job performance. As might or might not be expected, the Harris study found that emergent workers now outnumber traditional ones.

On the other side, however, there are still more employerswith traditional views than emergent views. That is one of the reasons why so many workers in so many occupations have been attracted to dot-com companies, which offer “stretch” assignments in fast-paced, ever-changing work environments – along with great sums of money and/or stock, at least until the well runs dry. It’s generally “up or out” – a philosophy practiced both by trigger-happy employers and by their job-hopping employees.

Not surprisingly, a number of dot-coms have failed over the past year for lack of profits, while the successful ones have grown larger and more bureaucratic. (One Silicon Valley company prided itself on letting employees bring their dogs to work, until scores of barking Fido’s recently brought that practice to a halt.

Nonetheless, having tasted personal freedom (or having seen their friends do so), employees everywhere are bringing new values and expectations to the job: Will I acquire new skills and competencies that will benefit my career (wherever it takes me)? Will I be challenged by stimulating problems and opportunities? Will I be adequately rewarded for my contributions? Will I be happy?

Taking Stock of Employee Morale

OK, some won’t be fulfilled and sooner or later will leave. Either their current turf won’t be green enough, or it will look greener somewhere else.

Frankly, their departures should not be the surprise they typically are. By conducting frequent performance reviews of both a formal and informal nature, a growing number of employers are discovering that it is possible to get inside the typical employee’s mind and discover what his or her personal goals really are. In some cases, they will mesh with the organization’s plans for the employee. In other cases, they will not – either because the employee’s goals are unrealistic, or because the company chooses not to meet them. (“You may feel you deserve a corner office and company car, but we don’t.)

Once goals are on the table, they can be addressed in various ways. The company, for instance, might inform the “keeper” that it plans a series of job changes designed to prepare the individual for general management. (Hint: Don’t promise what you can be sued for not delivering.)

In another set of circumstances, the company might propose a course or seminar that would make the employee better qualified to achieve his or her goals. In still another, both sides might agree that the employee’s needs would be best met elsewhere.

Honest exchanges between employer and employee thus accomplish two things.

First, they reduce the risk of employees leaving for the wrong reasons. Second, they reduce the element of surprise. When surprise is lessened, change can be anticipated and managed.

Steps You Can Take to Manage Change

Sanford Rose Associates recommends a five-pronged program to lessen the impact of employee departures – and, in fact, come out ahead:

1. Listen to what your current employees tell you. If there are common threads of employee anxiety or unmet expectations, it may be within your means to alleviate or eliminate them. In one company, employees felt that lock-step cost-of-living raises provided little incentive to go the extra mile. Once that concern was identified, the company converted to a pay-for-performance compensation plan that not only rewarded top performers but also caused dead weight to seek jobs elsewhere.

2. Start succession planning now. Despite your best efforts to provide good employees a perfect place to work, the “job of a lifetime” on occasion will be somewhere else. So don’t wait for Tom or Linda to leave to begin thinking about succession planning. Who else in the organization is prepared to take the job – or would be prepared with some additional training or cross-functional experience? In smaller, flatter organizations, there may not be sufficient bench strength – in which case it is none too early to begin discussions about succession with a trusted search consultant who understands your company and its needs.

3. De-brief those who do leave. Far too many companies, as if personally insulted when an employee resigns, call the security guards and usher the individual out the back door. Why not thank the person for his or her contributions and learn what you might do to prevent others from leaving – or how the company might improve or restructure the job for the next incumbent? There is valuable intelligence to be garnered from almost any departing employee, regardless of whether you plan to extend a counter-offer.

4. Take advantage of any management-level departure as an opportunity to re-think the job. Most executive positions reflect, to some extent, the strengths and weaknesses of the incumbent. Tom, for example, who just resigned as Vice President of Marketing, was a strong “idea person” noted for his ability to bring new product concepts to market and energize the company’s advertising agency to create great campaigns. Perhaps, at this stage of the company’s development, a more analytical executive is needed to sort out the company’s opportunities for e-commerce versus traditional marketing and distribution channels. Tom’s deputy, who has been trained by Tom, may not be the individual with the requisite experience, or fresh way of thinking, to take a hard-headed look at the New Economy.

5. Don’t keep other employees in the dark. If Linda left today to take an important job at another company, say so. If nothing else, it will increase your organization’s currency as a valuable place to work. If you know who Linda’s replacement will be, say so. If you plan to spend time re-thinking the position or conducting a nationwide search for her replacement, say so as well. It is axiomatic that when employees are left to speculate, they add 2 + 2 and get 3.

While most companies will not see an exponential increase in employee departures over the next few years, the combination of heightened employee expectations, a strong economy and a tight labor market almost certainly will cause the number to rise. Ask your SRA search consultant for an assessment of employment trends in your industry. Forewarned is forearmed.

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For more on employee retention programs, please see (or request a copy of) our July 2000 issue.

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