Employees Retention During COVID-19 Pandemic

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Employees Retention During COVID-19 Pandemic

Introduction

The pandemic has caused millions of people around the world to get used to working remotely. Moreover, in most cases, the crisis became an incentive for the transition to more technological processes. The trend of digitalization and enterprise optimization, which has been traced over the past couple of years, has only intensified and updated with the onset of COVID-19. However, as early as January of this year, executives placed the risk of losing talent as second to eleven other risks to growth (KPMG, 2020). Since the start of the pandemic, the risk of losing talent has emerged as the most serious threat to businesses, outstripping supply chain and environmental risks. Unlike the 2008 crisis, when the only strategy for companies was to lay off workers on a massive scale, retention is now a priority. Business leaders acknowledge that new challenges have arisen during the isolation period. A potential second wave of COVID-19 in their key markets is likely to exacerbate these concerns, further negatively impacting the prospects for key employee retention, talent recruitment, and workforce performance.

Background of the Retention Issue

Of course, retaining the current effective employees is the main task for all companies, not only during a pandemic but also in non-crisis times. However, the pandemic has left its mark on the mechanisms, methods, and the very principles of staff retention. In general, the HR strategies of companies during quarantine can be divided into two types. Some companies have used old approaches and followed a pattern: they laid-off workers without considering future needs or the impact on corporate culture and the cumulative experience of employees (Adhitama & Riyanto, 2020). Another strategy is to seek alternative approaches to reduce staff costs due to the risk of staff shortages (Deloitte, 2020). Such companies resort to long-term planning and try to keep the team in order not to lose competitiveness in the future.

The strategy of retaining qualified personnel paid off during the crisis of 2008, because the companies that were able to find a way to retain key personnel gained a significant competitive advantage in the post-crisis economic growth. All the more so, this will be relevant in the post-COVID-19 period. Today, the demand for a highly skilled workforce in the fields of engineering, IT, science, and technology is experiencing the greatest growth since the rapid development of Internet companies. As a result, managers of EST companies and HR specialists consider the task of competently motivating employees one of the highest priorities (Johnson, 2018). The period of the pandemic is forcing companies to implement a whole range of new approaches to personnel management. In the modern environment dictated by COVID-19, the priority is to retain employees, adapt to new conditions, and quickly adopt new approaches. The company is interested in the employee working in it for as long as he will be in demand and useful. Hence the desire to ensure the loyalty and dedication of employees. This is no longer the motivation of a specialist to work effectively and achieve a certain result, but the formation of a desire to work in this particular organization.

Retention Practices and Concerns in EST Small Business

Small businesses in engineering, science, and technology sector borrows the so-called long-term monetary programs to retain staff; these include the following (Carvalho, 2019; Park et al., 2019):

Deferred bonuses as participation of the main employee in the profits of organization, in which the remuneration is paid in stages over two to three years.
Long-term bonus projects based on key performance indicators (KPIs) in a strategic perspective for two to three years. This personnel retention tool has a positive effect on the level of employee motivation. As part of the implementation of this method, the management outlines a strategy for a specific period, determines the methods for assessing its implementation and types of remuneration for company managers after solving the assigned tasks. The strength of long-term bonus projects is considered the orientation of the companys top management to obtaining the planned result in the near future and, of course, to fruitful work in the team. However, there is a risk of shortcomings during the planning of tasks, for example, inadequately overestimated or, on the contrary, unreasonably underestimated key indicators.
Obtaining a share in the organization (partnership). This personnel retention tool is usually used namely in small organizations, where the individual value of effective employees is of great importance, and the overall success of the company really depends on the length of stay of such employees. For example, such a staff retention policy is inherent in various consulting firms (legal, auditing, and so on).
Bonus plan in project activities. This method of retention allows motivating employees to complete work on time with the proper quality and approved resources. It is especially important that after the completion of the project, all key specialists who influenced the success of the common work could become participants in the bonus program.

Small and medium businesses (SMEs) find it difficult to compete with large ones. Salaries in SMEs are lower than in large companies in comparable positions, and they are not always official. It is not often the case in small companies when a clear system of bonuses depending on the employees performance indicators exists. However, in SMEs, the salary system is more flexible, and as a motivation, the owner can offer key employees to participate in capital. At the same time, it would be very useful for small business leaders to adopt the clear system of bonuses common in large companies. If the company stipulates that at the end of the year or for the performance of certain projects and functions, the employee will receive a bonus, this can be a weighty and stimulating argument.

The main advantage of small companies is the human factor, and the personality of the owner plays a very important role. Many employees value small companies for their informal, often even family-like atmosphere and will not trade this for any high salaries in large organizations, where there are strict regulations that make the work atmosphere more formal and regulated.

Possibilities to Raise the Level of Retention Through Competent Motivation Tools

Material remuneration plays almost the main role in motivating employees. However, it will work if the company has a strong corporate culture, acceptable working conditions, relaxed relations between employees and management, and a full social package. Accordingly, if the corporate culture in the company is not developed at a high level, and the situation in the team is constantly tense, then it is unlikely that the management will be able to keep the staff only with increase in salary. If a company is underperforming, then financial stimulus unlikely will remedy the situation (Elsafty & Ragheb, 2020). Raising salaries, bonuses, as a rule, bring joy only for a short time. Money alone is not enough to keep employees and motivate them to work efficiently. Therefore, special attention should be paid to non-financial options for staff motivation.

Another argument against material incentives is the practical difficulty of creating a fair and equitable reward system. Even with detailed rules for how managers should evaluate the performance of their employees, the final assessments will very much depend on the attitude of the leaders themselves and their management style. Someone will give their entire team a high score, despite the existence of failed projects, while another will decide that such an assessment requires exceptional achievements.

Real motivators that increase employee engagement and job satisfaction also include development, training, increased responsibility, and recognition of achievements. These are factors that cannot be managed at a centralized corporate level they require an individual approach. Therefore, the only way to create a healthy motivating ecosystem in a company is to nurture a strong corporate culture, relying on which individual leaders will develop and motivate their teams. In such a system, the role of each specific manager for staff motivation becomes key. The leader must understand what exactly motivates or demotivates the employee and create appropriate conditions for him/her, along the way achieving the companys goals in terms of revenue, sales, efficiency, and so on.

Small companies have tremendous advantages in terms of internal communication between managers and subordinates, as well as management of team work. Setting goals for employees helps not only to constantly monitor their level of motivation, but also to increase it. In fact, research shows that even in the absence of financial investment, goal setting alone increases employee performance by 12-15% (Abdinagoro et al., 2020). While managers should strive to get their questions answered, experts advise handing over the initiative in such conversations to employees (McKinsey & Company, 2020). They should be able to regularly share their concerns and goals with their superiors. Regularity is especially important here; by meeting with employees on a weekly basis, the manager gains the opportunity to assess changes in their motivation over time and to work through past problems (Chanana & Sangetta, 2020). It is rational to set measurable and realistic goals for people and remember to regularly discuss the process of achieving them. Since most of the goals set for individual employees or the entire workforce take a long time to achieve not a week, but at least a year and a half, frequent discussion becomes a necessity, especially for those people who are stimulated by frequent rewards.

In the current period, such a characteristic as emotional intelligence is gaining in importance. An effective leader shows empathy and self-interest, even in a crisis. He understands how much the personal priorities of employees are changing in such a difficult time. Work fades into the background, and the most important thing is taking care of the health of loved ones, establishing everyday life, and overcoming the inherent anxiety in the face of mortal danger.

Today, non-standard solutions are offered in the field of staff retention, in particular, the use of a loyalty index to assess the potential situation with retention in the near future. The Loyalty Index (NPS) is commonly used to measure customer loyalty, and it can equally well be applied to work team (Carvalho, 2019). This is a well-developed and studied technique that can be successfully applied not only to consumers, but also to employees.

In addition, it should be borne in mind that personnel involved in the development of software products or new technologies have a special mentality; the work of engineers and researchers in small businesses and large corporations is significantly different. In small EST companies, the human factor is the most important resource in creating a product that will bring economic benefits and allow the enterprise to continue to exist. The structure and complexity of motivational management in strategic management should be adequate to the complexity and scale of the companys goals.

Agile in HR

Agile HR is one of the most popular concepts of staff motivation and retention today. This approach, which once came from software development, is now actively used in various departments, not only in IT, but also in other EST companies. The fundamental theses of the approach were formulated in the Agile Manifesto and later adapted for HR services (Dank & Hellstrom, 2020):

Development of cooperation is more important than hierarchical structure
Transparency is more important than closedness
Flexibility is more important than following regulations
Inspiration and engagement are more important than leadership and retention
Intrinsic motivation is more important than external rewards
Initiative is more important than following job descriptions

Building a workflow according to the above principles is a long-term task. As with any change in thinking and culture, Agile requires time and effort on the part of everyone involved. With the shift to self-organized and distributed teams and more employee engagement, the role of the leader is transforming. Instead of a person who gives orders, he becomes a leader and focuses on helping others to develop, on creating a safe environment in which employees will want to set goals for themselves and make decisions. During a pandemic, this will allow employees to focus on initiative and participation, instead of fear, passivity, and uncertainty. The more friendly and open the environment, the more accurate the understanding of the needs of employees, the earlier mistakes are found in the work, and the initiative becomes more large-scaled (Thoren, 2017). Success is based on the creation of a favorable environment for the development of cooperation, internal motivation of personnel and the development of personal and professional qualities.

Overall Implications

EST employees, that is, knowledge workers, are enthusiastic about challenging tasks. This is their natural occupation; however, one must take into account that it is important for them to understand the meaning and purpose of their work, they need recognition and respect. Today, amid a pandemic, under changing work standards and a high degree of uncertainty, it is especially important that such employees be given the opportunity to adopt responsibility and take an active part in the companys activities. For them to be able to generate innovation, they need to be empowered and given creative freedom. The company must consider the views of its employees on how to support them and this applies not only to career development, but also to the entire human value chain. As well as management methods in general, personnel management should become more flexible, comfortable and motivating. HR decisions must be made jointly with employees and continually improved. This is a prerequisite for creating an environment that inspires and engages each team member.

References

Abdinagoro, S., Faisal, M., Gandasari, D., Tjahjana, D. (2020). Transformational leadership, communication quality influences to perceived organization effectiveness and employee engagement and employee retention during the COVID-19 pandemic. Journal of Advanced Research in Dynamical and Control Systems, 12(SP7), 773-787. Web.

Adhitama, J., & Riyanto, S. (2020). Maintaining employee engagement and employee performance during Covid-19 oandemic at PT Koexim Mandiri Finance. Journal of Research in Business and Management, 8(3), 6-10.

Carvalho, J. C. (2019). Strategy and superior performance of micro and small businesses in volatile economies. IGI Global.

Chanana, N., & Sangetta, S. (2020). Employee engagement practices during COVID19 lockdown. Journal of Public Affairs. doi: 10.1002/pa.2508

Dank, N., & Hellstrom, R. (2020). Agile HR: Deliver value in a changing world of work. Kogan Page.

Deloitte (2020). Workforce strategies for post-COVID recovery.

Elsafty, A., & Ragheb, M. (2020). The role of human resource management towards employees retention during Covid-19 pandemic in medical supplies sector Egypt. Business and Management Studies, 6(2), 50-59.

Johnson, T. (2018). The real problem with tech professionals: High turnover. Forbes.

KPMG (2020). Workforce, workplace, and HR reshaping during COVID-19 pandemic.

McKinsey&Company (2020). HR says talent is crucial for performanceand the pandemic proves it.

Park, C., McQuaid, R., Lee, J., Kim, S., Lee, I. (2019). The impact of job retention on continuous growth of engineering and informational technology SMEs in South Korea. Sustainability, 11, 1-19.

Thoren, P. (2017). Agile people: A radical approach for HR & managers. Lioncrest Publishing.

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