News Flash! The economy stinks.
We live in unprecedented times. Uncharted waters. Not since the great depression have we been in such a state within our economy and I would argue that, for employers, it may be worse. We are no longer a manufacturing, industrial economy. We are a service/informational based economy that is heavily dependent on skilled professionals who are unbound by normal processes or taught methods. These are people like those in media, advertising, and other creative pursuits--industries heavily reliant on the talent of individuals. Put sales in that category too. That makes for dicey dealings in an economic climate such as ours.
In our economy, most businesses, in order to survive, have been doing the unthinkable. Salaries have been cut, mandatory unpaid furloughs have been imposed, pension plans have been frozen, and stock options have been terminated (and existing options are so far under water that they are, in effect, worthless). Many businesses have half the people doing twice the work these days. Drastic times call for drastic measures.
And the employee base, looking around and seeing that every tenth person is praying their unemployment doesn't run out before the economy rebounds, is grateful to be working and still drawing a paycheck. They have no intention of going anywhere. In a bad economy, loyalty runs deep.
It really begs the question--what happens when the economy turns?
There are really no more golden handcuffs. Employers may think that those loyal employees will still remain loyal and grateful, or even their carefully crafted employment agreements with terms and conditions--particularly non-compete clauses--will be intact.
I'm not an employment lawyer, but I've been on both ends of employment agreements for many people. I certainly know that all employment contracts are written differently. But I also know that any one of the basic terms of any agreement, once breached, effectively renders the entire agreement null in many cases. So if you're an employer who has imposed furloughs, cut salaries, etc. for contracted employees, those contracts may no longer be binding. What an employee verbally agreed to will not likely have any bearing on the written terms. It's more likely that agreements will be void.
I'm big on predictions. I am going to predict that smart employers, anticipating the economic turnaround will see the signs and become protective, and at the same time, predatory. They're going to know that there are no strings attaching employees. Even if some employers don't see it coming, the headhunters are likely strategizing about the potential now. The gloves will be off even before the economy turns to acquire top-level talent from companies who have left themselves vulnerable in a down economy. "I'll make it up to you someday" won't be good enough. And all that gratitude and loyalty will quickly dissipate when dollars from businesses who want to acquire top talent are dangled.
The question (always) is "when?"
I have a few suggestions that smart employers will embrace today, regardless of the "when" if they want to retain their top talent:
1. Identify your franchise players. You'd best make a list of the people whom you'll need to be able to rebuild your workforce in the near term. I'm talking about those people that are highly skilled thinkers and creative people who don't perform skills, but rather, produce work. Those are the people that must be retained.
2. Schedule individual meetings with each franchise player. In that meeting, first--thank them for their loyalty and acknowledge the fact that they have sacrificed in the difficult environment (communicates that they are important-that can go a long way). At the same time, structure a new agreement to supersede any previous agreements--even if an agreement didn't previously exist. It can be triggered by certain economic events/conditions for the business. But there must be a commitment to the franchise employee for some payoff that will keep them working for you (literally and figuratively). The employee must have something to look forward to. They must have a reason to stay, outside of these are nice people.
3. Make a list of potential players from other teams. If there is going to be switching, best be prepared for the turnover. Assume that companies will acquire employees from you; you'd best be prepared to get some from others; be opportunistic. Seize the opportunity to upgrade in key areas.
The real goal should be to retain the franchise players that make things run.
I theorize that many businesses are going to be caught like proverbial deer in the headlights. For the time being they are just trying to survive day to day. The smart businesses--perhaps those who read this, will start planning ways to keep the employees who are loyal today but may not be when the headhunters start calling and there is no incentive to stay. Employees who feel underpaid and undervalued and who have made sacrifices will be vulnerable to predators. There will be winners and there will be losers in the workforce shuffle that will occur.
Recognize the perils of risk walking into an empty office when things rebound and business starts heating up.
