The Small Business and Human Resources 2011 Outlook Survey completed by Insight Performance and the Small Business Association of New England (SBANE) has found that many companies are beginning to turn the corner.  Sixty-nine percent of respondents reported that business conditions in 2010 showed an improvement over 2009 and 78% predict that 2011 will be even better.  So, the good news is, we're moving in the right direction.  The question now is, what does this mean for employers and their relationship with their employees?  The employees you have now are likely your top performers.  They are the employees you choose to keep around as you may have been forced to lean-up your business.  They have weathered the storm with you, likely have survived lay-offs and many haven't received a merit increase in over 2 years.  Employee retention will require attention and forethought. 

First and foremost on many employees' minds is their pay.  What are your plans for compensation increases over the next year or two?  According to the survey, 38% of employers plan to offer base-pay raises in 2011.  If you plan to offer a merit increase, do you have a pulse on the market rate for key positions in your organization?  You'll want to make sure you have a compensation philosophy that fairly compensates these key employees and you are able to show you value their commitment to the company. 

If you are unable to offer compensation increases at this time, you shouldn't just ignore the elephant in the room.  Ignoring the reality will decrease employee morale and cause the very employees you're trying to retain to begin questioning their commitment.  The first step to sending a bad message is to communicate and then communicate some more.  Being open and honest with employees about the state of the business and your plans for the future will invest employees in your strategic direction.  Think creatively, out-of-the-box about other options that you can implement to show employees they are valued.  Do you have a rewards and recognition program?  Is it effective in showing the value of your employees?

As businesses turn the corner, recruiting will become a key initiative for many companies in 2011.  The survey found that 58% of companies have plans to add to staff and a whopping 93% plan to either retain or increase staffing levels.  Employees who have stuck with you and seen their co-workers laid-off may resent these new hires or, on the flip side, might look to them as their saviors to being over-worked in a lean staffing model.  Being sensitive to the assimilation of new hires will set both them and the company up for success.  As with any new hires, you'll want to make sure they're properly trained in the specifics of their job and their department, but also the mission, values and strategic direction of the company.

It's fair to say we're not completely out of the woods yet.  Businesses are apprehensive and many are more conservative than they were two years ago.  But, the trend is for more positive growth and with that, companies will want to turn their focus to their employees.

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