Employee Retention on the Back Burner

Major layoffs seem like a daily occurrence as companies whittle away at costs in response to economic times that get scarier every day. Siemens AG is the new name on the list of companies that are reducing staffs; the German engineering giant announced plans to cut a little more than 17,000 white collar jobs worldwide, which represents about 4 percent of its workforce.

As white collar layoffs mount, senior accounting professionals who already had more than they needed on their plates, may see their workload mushroom even further. According to a new survey of more than 1,400 CFOs nationwide sponsored by Accountemps, 35 percent of respondents cited heavy workloads as the chief workplace concern for their financial teams. Their number two concern was job security, which weighed in at 19 percent of survey participants.

What can finance leaders do to prevent burnout from work overload or fear of job loss among the talent the company needs to keep from cutting and running? Max Messmer, chairman and CEO of Robert Half International, suggests that managers should closely monitor employee workloads to right any imbalances and maximize the productivity of the entire group.

In fact, employee retention is such a critical issue that at a growing number of companies it’s a component of executive pay plans. The Wall Street Journal cites a study by the Hay Group showing that the use of turnover as a performance measure in incentive plans has tripled since 2005, although the number of companies that do so remains small.

But professional services firms, whose life’s blood is employees, continue to make big investments in strengthening their workforce. For example, Deloitte LLP just announced that it will invest about $300 million in a new state-of-the-art learning and leadership development center in the Dallas-Ft. Worth area. Construction on the new facility will commence next year and the center is scheduled to open in 2011.

Businesses that cut so deeply that they over-reduce their workforce or fail to spend enough to support the development of survivors run the risk that when the economic tide turns for the better the challenges of recruiting and training new workers will jeopardize their competitive position.