Employee Retention: Bigger Issue Than You Think

By Sheila Gibbons

An economy that’s still in the process of picking itself up, and the effects of sequestration, may be creating a false sense of security among employers who believe such uncertainty virtually guarantees their employees will stay put. Retention, they think, is something they don’t have to worry about too much at this time.

But data from The Conference Board, which tracks turnover risk within different segments of the work force, suggest that it’s a company’s most valued employees who are at the highest risk of departing. One of four “high-potential workers” is considering leaving their employer, compared with one of 10 other employees. The high-potential workers have shouldered additional burdens during the recession and recovery, usually without receiving an increase in rewards. Failing to address retention of this group will be costly, The Conference Board warns.

This issue hasn’t been lost on Adelle Pierce, president of AM Pierce & Associates in Lexington Park, who founded her company nearly six years ago and already is at No. 203 on Inc. Magazine’s 2012 Inc. 5000 list. Retention is literally her bread and butter because, as she likes to say, “We sell belly buttons and gray matter. People with specific expertise is what many defense contractors provide.” Turnover can be deadly.

“In the model we’re in, where we deliver subject-matter expertise resident in individuals in a cost-reimbursable environment – especially if it’s a niche expertise in a high-tech environment – demand is high and supply is low,” she says. “Your human capital is a fundamental part of what you’re delivering. Even in a down environment, the demand for those skill sets remains high, and the competition for retaining that talent remains high. The strong, really good performers aren’t necessarily affected by the fact that the economy is down because they bring value to the company, customers and clients. They’re not easily replaceable.”

Ms. Pierce says she and her management team view retention – and recruitment as well – as key elements of AM Pierce’s corporate strategy. Employee engagement is essential, she says. “We expect our management team to stay engaged with their employees. It’s actually in their goals and objectives that they have a certain number of touch points with their employees.” She says she and her team make an effort to recognize and reward employee accomplishments, foster growth and development, address work-life balance, and, as best they can when there is pressure on corporate costs, protect employee-related incentive programs by budgeting for them.

The prospect of sequestration offered opportunities for, as well as challenges to, employee loyalty. Ms. Pierce was active in working with the Navy Alliance, Small Business Roundtable, the Patuxent Partnership, the Professional Services Council and NAVAIR leadership. “The intent was to be in a position to have authoritative information on the facts so we could be part of the analysis of sequestration on the defense budget and work force and how that would affect our contracts and employees,” she says. That information was then pushed out to employees via emails and a series of “all-hands” conference calls, during which Ms. Pierce also took questions.

The flip side of retention is recruitment, and here employees also have a role to play. “We’re still small enough [48 employees] that we find that employee referrals are effective,” Ms. Pierce says, adding that she offers bonuses for referrals that lead to hires. “We often invite transitioning military folks to meet with us and provide some advice about making the transition out of uniform into the industry work environment.”

The key, she says, “is creating that culture where people want to be part of the company and what you’re building. You do that by having your corporate brand, your corporate identity, embedded through all aspects of how you run the business. You hold the management team accountable, budget appropriately for recruitment and development of human capital, and follow through.” It’s not all work; the company had a fifth anniversary dinner for employees and guests at Running Hare Vineyard in Prince Frederick. Recurring events include a summer picnic, chili cook-off and a holiday open house.

“We try to be thoughtful and deliberate as we make decisions with regard to the impact on our employees,” Ms. Pierce says. “It’s an important differentiator for us and a critical component of our success.”

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