In the last post, I covered the first key to retaining employees in a rebounding economy: creating the culture you want. The second key to retaining employees in a rebounding economy is to actually “treat” employees as your most 
important asset.
We’ve all run into organizations that have posted somewhere on their walls “people are our most important asset.” Unfortunately, it is the rare organization that actually can show that their behavior backs up their words. It eventually becomes a very sad running joke in the organization.
To me, treating employees as your most important asset really starts with engaging employees. There has been much written over the past several years about employee engagement. Recent studies have conflicting messages regarding the status of employee engagement in today’s tough times. Gallup’s research indicates no real change in engagement levels since the economy has been struggling. Hewitt reports that employee engagement is at the lowest level it has been in the last 15 years. And, Sibson Consulting reports that engagement in 2009 was actually up versus 2006. So, there’s no definitive answer to whether engagement is improving, diminishing or staying the same.
Much of the past research shows a correlation between engagement and bottom line results. Whether it be shareholder return, growth statistics, customer satisfaction, turnover costs, absenteeism costs, safety incidents, etc., there is little dispute that organizations with engaged employees are also more profitable or more effective. Purists have argued that there has been no research showing a causal link between employee engagement and business results. That is, until now. Gallup researchers working with the University of Iowa have demonstrated longitudinal research showing that engaged employees cause high retention rates, better financial performance and better customer loyalty. This relationship was strong versus the relationships going the other way. In other words, having better financial performance was not shown to have a strong causal relationship with improved employee engagement.
If other studies can confirm this research, it should give organizations a mandate to really treat employees as their most important asset because doing so will give the organization a better chance at the results it wants. And, in tougher economic times, it is that much more important to do so because you can’t rebuild trust overnight. So, when the chips are down, that’s the time to invest in strengthening your relationships at work.