Communications as a Competitive Advantage

 Like all economic recessions before it, this one, too, will eventually come to an end. Corporate revenues, profitability and stock prices will rise. The rate of GDP increase will go up. Unemployment rolls will decrease and hiring will resume. And when that happens, employees’ behavior will change.

      Specifically, the behavior to which I’m alluding concerns those latent desires to roam, to find a new job. Put another way, just because employee attrition rates are low now doesn’t mean that everyone wants to stay where they are. It has a lot more to do with high unemployment rates than happiness on the job.

      For the time being, for the sake of job security and a steady paycheck, people are tamping down their dormant desire to leave and find a new job, often putting up with otherwise untenable situations. But when the economy improves enough to resume its usual competition for talent, they will likely be on the prowl and jump at the first promising opportunity that comes along.

      By the way, the first ones to leave will probably be among companies’ best, most valuable people.

Investing Twice

Regardless of the state of the economy, employee turnover is an expensive proposition on at least two levels. The monetary costs associated with finding, hiring, paying, training and retaining people are not insignificant.

      Organizations that experience high attrition rates are wasting a lot of invested capital, an investment that will have to be made all over again to replace the lost personnel. In other words, at companies with a high turnover rate, hiring costs are at least double what they need to be.

      Secondly, and perhaps more important, retaining and building on the institutional memory and knowledge of your most valuable people is a reward that keeps on giving.

      So, being adept at hanging onto your best people is a distinct competitive advantage, more so when this recessionary period concludes.

      Money that would have to be spent replacing lost employees is put to better use – such as on raises and bonuses to incentivize our best people, thereby creating a cycle that repeats itself.

      But why do some companies experience high employee turnover while others don’t, particularly in that critical transitional period coming out of a bad economy?

      Answer: Probably because of poor internal communications.

      Effective, ongoing employee communications and transparency are a critical means to preventing this loss of talent. The best managers and corporate leaders are skilled communicators, engaging their employees regularly, providing them timely and relevant information about the state of the company, while demonstrating their appreciation of their people. They listen closely and learn from their employees.

      PepsiCo CEO Indra Nooyi characterizes her company’s attitude toward its employees with one word: “Cherish.” In her 2007 annual letter to stockholders, she wrote that it’s one of her personal performance goals: “…cherishing our employees, what we call talent sustainability.”

Employees Notice

Being appreciated, having their views and insights heard and responded to is something that people treasure. They pay attention to supervisors, managers and leaders who communicate consistently and honestly. A symbiotic relationship is established: when people are listened to, they in turn listen closely; and when they are provided timely, relevant information, they in turn provide information.

      Communication inside an organization is its oxygen. Stifle people, put them in a box and restrict or inhibit the two-way flow of information, and they whither. Conversely, they thrive in a communication-rich environment.

      Employees who are flourishing within an organization are engaged: engaged in its vision and the specific strategies that will attain it. Engaged employees are more likely to stick around when the economy improves. Why would they want to leave a company that treats them with the respect and dignity they rightly deserve?

      Invest in the future success of your organization by investing in employee communications and engagement now, before the economy improves, and you will reap untold dividends for years to come.