With many companies fighting to keep expenses down and hold their firms together through the recession, it can be a challenge to plan ahead for the inevitable economic recovery. It’s essential, however, if companies want to avoid high turnover.

With many companies fighting to keep expenses down and hold their firms together through the recession, it can be a challenge to plan ahead for the inevitable economic recovery.

It’s essential, however, if companies want to avoid high turnover.

Data from past recessions show a higher-than-normal rate of employees quitting their jobs and finding new work when the economy expands after a recession.

The phenomenon, dubbed a “resume tsunami” by researchers at Deloitte Consulting, comes when workers who suffered through the anxiety of cutbacks defect in droves for better opportunities.

Some turnover is expected, if not necessary, after a recession. But companies need to keep their top talent happy now so they’ll stay loyal during the rebound.

“The more investment they can put in now, the more likely it will be to not lose too many employees,” said Robin Erickson, a manager in Deloitte’s Human Capital division.

“At a time like this, you need to do as much as you can to care for everyone and do a little extra for your top performers. Companies, if they lay off poor performers, have a pool of people left that they should take good care of.”

Industry worries

In a survey of 319 international executives, Deloitte found that those in health care and life sciences were most concerned about turnover a year after the recession ends. Sixty-eight percent of executives expected turnover to increase, compared with a 52 percent average.

Technology, media and telecommunications firms were next on the list, followed by financial services, consumer and industrial products, and energy utilities.

At Rockford Memorial Hospital, upper managers are constantly working to keep benefits competitive. Perks offered to employees include an on-site day-care facility, tuition reimbursement and adoption assistance.

“We do surveys on compensation and benefits and surveys on their job and department satisfaction,” spokesman Mike Wiltse said. “That’s key because when employees are happy, they want to stay where they’re at. When employees aren’t satisfied, we develop action plans to address it.”

That’s the first lesson Erickson preaches: keep an open line of communication with employees, especially during cutbacks.

“Although we all say we communicate with employees, the more honest and transparent the communications can be, the more likely you are to be able to maintain some sort of that very important credibility and trust of the employees,” she said.

About half of the managers surveyed by Deloitte recalled voluntary turnover increasing at the end of the 2001-02 recession. Looking to the end of this recession, managers see greater turnover potential among workers younger than 30, with 63 percent of execs predicting a significant flight among that group.

Bonds needed

In her research, Erickson speaks of the “social contract” that implicitly exists between an employee and employer. The employee expects to be paid fairly, get merit raises, receive job training and have job security. In turn, the employer expects hard work, two weeks’ notice before leaving, overtime work when necessary and loyalty to the company.

“When organizational changes occur, like a merger and acquisition or a downsizing or an Enron-esque financial meltdown, that violates that psychological contract,” she said. “When companies downsize, they need to pay attention to their survivors. Most companies treat their employees like they’re lucky to still have a job — that’s actually been said. When you think about it, that’s not the most effective way to inspire confidence.”

Hamilton Sundstrand, which has 2,200 employees in Rockford, has had several small rounds of layoffs this year, although the company has continued to hire in critical areas. HR Director Kristee Mahler said managers gathered with their staffs during the layoffs to discuss the situation.

“We certainly considered the effects that will come after the recession,” she said. “We try to treat our employees very fairly at all times, not just in poor economic situations. By doing so, we believe that we build loyalty.”

Mahler said Hamilton Sundstrand conducted its biannual employee survey this year and has formed employee action teams to look at the results and analyze things that staffers want to see changed.

The company also offers employee network groups, including a young professionals organization, to give staffers forums to focus on issues important to them. They also encourage involvement in the community to foster a sense of loyalty.

Along with communication, Erickson said, companies can direct their retention efforts toward giving employees support from their immediate supervisors.

“A high percentage of people leaving their positions would be because of their managers,” she said. “Managers should be meeting regularly with employees, inasmuch as they’re able to within the legal realm of HR, to confirm to people their value and that they’re not at risk of being laid off, or at least not at risk right now.”

Sean F. Driscoll can be reached at (815) 987-1346 or sdriscoll@rrstar.com.