What can you do about the negative impact of a poor economy on employee retention?

When times are economically tough, employees become distracted and anxious about their futures, which can adversely affect a company's retention. Employees who are distracted by the financial unknowns a weak economy creates are more likely to deliver poor customer service, be less intellectually engaged in their jobs and even make plans to leave.

Employees' attitudes will decline in uncertain economic times, but there are things management can do to improve those distracted, concerned mindsets. According to Sirota Survey Intelligence, companies should take the following steps to ensure their retention rates remain stable even during the most unstable economic times:

• Build a partnership culture. Companies with a partnership culture consistently outperform their competitors during both boom times and downturns. A partnership culture is characterized by 12 hallmarks, including basic trust; a long-term perspective; joint decision-making; open communications; financial sharing; and equitable day-to-day treatment.

• Create, communicate and then exhaust rings of defense before downsizing. Employers with the highest rates of retention are those that treat their employees as true partners and make every effort to avoid layoffs. The key is employees having trust in management; they need to trust that management is being absolutely open and honest and is doing everything it can to cushion the blow. When it does become necessary to reduce costs, many steps can be taken as an alternative to involuntary layoffs. These are what Sirota calls the rings of defense.

• Focus on the local behavior of immediate supervisors and managers. Simple management behaviors such as giving timely recognition to employees, supporting their continued development and providing coaching and guidance mea a lot to employees--especially when they are anxious. During tough economic times, it is even more important to be consistent between words and actions and to create an environment where everyone is respected.

• Pay more attention to high-potential employees, who are most likely to leave during difficult times. Even in a tough economy, high-potential employees have other opportunities. Consider developing a retention strategy for high-potentials that includes a strong focus on career development.

• Create ways for all employees to contribute to the company's efficiency and effectiveness goals. One excellent mechanism is gain-sharing efforts, which is a method for sharing gains with employees--the gains that employees themselves achieve for the organization.

• Don't exclude employees from assisting with possible solutions. Management often keeps plans and information very close-to-the-vest during difficult times. Communicating openly and asking for help in developing actions to be taken helps minimize feelings of powerlessness.

• Don't stop performing periodic employee assessments. Companies need to assess how anxious their employees and leaders are feeling about internal and external issues, and how well their culture and management practices are buffering. Monitor workers' stress levels, their perceptions of their workloads and be on the lookout for burnout.

In addition, a survey conducted by Quantum workplace revealed five key reasons why their employees stay even during tough times:

1. Setting a clear, compelling direction that empowers each employee. While the future might look grim to some employers, employees at other companies are working hand-in-hand with their supervisors to create a positive future for the company.

2. Open and honest communication. While some employers are hiding bad news from their employees, other companies are keeping their employees informed and updated, even if the news isn't always good.

3. Continued focus on career growth and development. While some employers are cutting jobs or scaling back on promotions, other employers are helping their associates see opportunity in the midst of the crisis for their own growth and development.

4. Recognizing and rewarding high performance. While some employers may be instituting hiring freezes and cutting back on perks, others will continue to finds ways to reward those who are taking care of customers and keep them coming back.

5. Employee benefits that demonstrate a strong commitment to employee well-being. While some employers are scaling back employee benefits, others are committed to helping maintain the health and vitality of those who work for them.

And here are five tips for practicing the communication that has been deemed so vital:

1. When communicating, understand the unique needs of your individual employees and that one size does not fit all;

2. Provide consistent and open communication that informs on strategy, goals and current performance metrics;

3. Offer context so employees understand how they are contributing to the success of the organization and how they can positively impact results going forward;

4. Don't make predictions, state facts; and

5. Be authentic, show compassion and empathy.

Employees' responsibilities. The responsibility for motivating employees to survive a poor economy with high spirits and a productive job performance doesn't all fall to the employer. There are several actions employees can take, too. According to BlessingWhite, employees should be encouraged to:

1. Know themselves. It is more important than ever for employees to know themselves as people and as contributors to the organization. Understanding what motivates can help in riding out the rough seas.

2. Create a plan for weathering the storm and define who needs to be involved in that plan (e.g., colleagues, boss, customers, etc.).

3. Communicate openly with managers, peers and associates. It may also help to schedule more formal discussions with management or associates to sharpen the employees' focus and ensure everyone is on the same page.

4. Learn and experience all that you can. Downtimes allow employees to try something they may not have had the chance to during periods of growth.

5. Choose whether your lens will be positive or negative.