Leadership coach Mitch Simon gets frustrated every time he sees a company with shortsighted management. When the hard times hit, employee training, development and coaching are often the first victims of corporate cost cutting. Simon knows those are the ties that bind employees to their employers and is frustrated that so few companies understand this.
Employees are bound to companies only as long as their employers provide them with skills and training to improve their job situations, Simon says. Once that ends, the relationship sours. “That’s what makes it so frustrating,” he says. “Companies lose good people because they don’t take care of them in times like this. This is when companies should be investing in their workers.”
Simon’s theory is underlined in a new employee loyalty study from Walker Information, an Indianapolis research company. Walker’s survey of 3,350 workers shows that nearly two-thirds of the work force is disenchanted with its job situation and is ready to leave at any time. The national survey found that 31 percent of workers feel trapped in their jobs, unable to leave because they don’t have the skills for other jobs, don’t feel confident that they can find replacement jobs or are bound by lucrative pay and benefits.
An additional 34 percent of workers are regarded as “high risk,” those who are looking for jobs right now or would leave at the first opportunity.
“Obviously, this isn’t a good sign for employers,” says Marc Drizin, Walker’s loyalty specialist. “It means that just 35 percent of the work force feels good in their jobs.” Drizin thinks there is a steep cost to all this. The direct cost is that workers will flee to other companies when they have the chance, leaving their former employers to foot recruitment and training costs for new workers. In some positions, it may cost a company up to a year’s salary to replace just one employee.
But hidden costs are present, too. Drizin thinks that many of the disenchanted workers simply go through the motions on the job, unmotivated to give more than the absolute minimum. It is a problem that seeps out of the company to customers. “The service aspect of your company clearly suffers, and customers notice,” Drizin says. “It can affect customers to the point that they no longer will do business with the company if they can find another company to deal with. Those costs are hard to document, but they exist.”
Drizin says that while human resources workers are well aware of this disenchantment and the ramifications, senior executives often don’t grasp this. “There is a disconnect,” he says.
Sixty-eight percent of senior executives in the Walker survey said they were happy in their jobs, compared with 47 percent of middle managers, 35 percent of supervisors and 24 percent of the remaining employees. “It’s hard to get the company to deal with this, because board members perceive the way they feel about the company is the way other employees do, too,” Drizin says. “That is not the case.”
Simon and Drizin think employers should be addressing this today, before the labor shortages predicted for later this decade take hold. The National Association of Manufacturers recently forecast that the United States will have a shortage of 7 million workers by 2010 due to the retirement of baby boomers, creating a scramble for both skilled and unskilled workers throughout the economy. “Employers have to quit looking at training as a cost and look at it as an investment,” Drizin says.
Simon is even more direct. “The opportunity for employers to turn this around is right now,” he says. “You have the chance to create a situation that makes your employees happy to be working at your company. If you don’t do it now, you will lose employees when the economy turns around.”