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(May 10, 2001) Like lemmings, the vendors in our industry have latched on to the concept of retention as an alternative to solid Labor Supply Management. Like most ill considered fads, it's just plain stupid as a generality. Sure, workplaces should be places that employees find challenging and like to visit. Certainly, equity (both financial and political) is a critical workplace issue. But, keeping everybody forever is not a good idea.

Consider the federal government, the acknowledged master of retention. (That should scare you adequately...get a retention program so you can mold your management to follow the government example.) The particularly outrageous retirement benefits lock employees into jobs and career tracks. Challenge is a secondary concern, getting the job done every day is the basic mode.

The retention programs are so good that it has been hard, for a generation, to get a job in government. Essentially, someone must die for an opening to be created. The same holds true for advancement.

Now, the government is facing the consequences of really good retention. In many offices, from the IRS to the CIA, 40% of the employees in the agency will retire during the next four years. And, guess what? There is nobody in line for the jobs.

Successful retention programs caused the government to lose its touch with the real changing market dynamics of acquiring and maintaining employees. As a result, the restaffing of the government will require increased pay, modified benefits and a host of alternative approaches. Their extremely successful retention packages will force them to become a very aggressive player in the competition for Human Capital over the next five years.

Meanwhile, the labor shortage continues to escalate.

The point is that very clear thinking is required on the subject of human capital and inventory management. There are no generalities that work at the top level. An organization is no more likely to want to retain all of its employees than it is to want to fire them all. Retention programs must be tailored to achieve very precise objectives.

Retention is not a panacea.

- John Sumser © TwoColorHat. All Rights Reserved.


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