I’ve been watching an important trend for several years, and I see that the Washington Post just published an article on the growing difficulty of retaining top talent.

Here’s the story:

During the recession, employers have been under heavy pressure to do more with less.  They’ve shed employees, delayed training investments, and generally made life more miserable for employees.  For YEARS.

What’s prevented employees’ escape is a fear of not being able to find another job.  It’s a reasonable fear, of course – just look at the unemployment rate.

But things are shifting.  Unemployment is on the decline, and the ability to switch employers is improving.

So here’s what happens, and I’ve seen increasing examples:  A top employee is “poached” by the competition.  The other employees see this, and conclude two things:

  1. Y’know, if he can get a better job, maybe I can too!
  2. Life is going to be miserable here, because all they’ll do is to take his work and dump it on the rest of us.  I don’t know if I can handle the increased load.

Now you have a number of employees who are actively looking at the alternatives out there.  Guess what?  They just might find an improved labor market, where salaries are ticking up and other employers are treating people a little better.

Oh, by the way, the people who will find jobs the easiest are your top employees.  They have the deepest skills, contribute the most, and are the most valuable to other companies.

When this starts happening to you, what can you do?  Well, you can try bribing people to stay when they threaten to leave, but that’s way too late.  By the time someone talks with their boss about leaving, they’ve already made a mental switch that they’re out the door.  It’s almost impossible to change their mind at that point, and it also shows your other employees that you’re open to be manipulated by threats.  They’ll feel cheated.

You could go and give everybody a raise right now.  That would make a big impression – at least for a little while – but can you afford it?  And will it really change peoples’ minds in a few months?

You can resign yourself to the fact that this is going to happen, and start the process of hiring new employees to replace the turnover.  But remember that you’ll probably be giving new people a significant bump in pay, and they may not be effective for quite awhile.

No, the answer is to work on the deep and important stuff:

  • Personal relationships with each and every employee
  • Understanding what motivates each individual
  • Creating the company culture which helps people love where they work

Yes, I know, this takes a lot of time and energy.  And you may have to build up a lot of momentum before your employees start noticing a difference.

So I guess that means you need to get started NOW, before you start losing all your top people.