Page 72 Business Conditions When unemployment is low andor businesses are

Page 72 business conditions when unemployment is low

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have the flexibility to use examples that are geographically and/or business-unit relevant. Page 72 Business Conditions When unemployment is low and/or businesses are growing at a high rate and need more employees, companies often find it difficult to attract new employees, find employees with necessary skills, and retain current employees.35 Companies may find themselves in the position of hiring employees who might not be qualified for the job. Also, in these types of business conditions, companies need to retain talented employees. In the knowledge-based economy (including companies in information technology and pharmaceuticals), product development is dependent on employees’ specialized skills. Losing a key employee may cause a project to be delayed or hinder a company’s taking on new projects. Training plays a key role in preparing employees to be productive as well as motivating and retaining current employees. Studies of what factors influence employee retention suggest that employees rate working with good colleagues, challenging job assignments, and opportunities for career growth and development as top reasons for staying with a company. Across all industries, from high tech to retailing, companies are increasingly relying on training and development to attract new employees and retain current ones. For example, companies such as Eli Lilly (a pharmaceutical company) and Microsoft are successful in terms of financial returns. They are typically found on lists of great places to work (for example, Fortune magazine’s list of “Best Companies to Work For”). They are quite successful in attracting and retaining employees. Not only do they provide employees with very competitive pay and benefits, but they also are committed to training and development. Retailers such as Macy’s and
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Nordstroms cannot generate sales unless they have enough skilled employees.36 For example, Macy’s begins its employee retention strategy by starting with executives. Executives are accountable for retention of the employees who report to them. Managers have been trained to run meetings and conduct performance evaluations (skills that influence employees’ perceptions of how they are treated, which ultimately affects whether they remain with Macy’s). Macy’s has also provided training programs and courses for employees. For companies in an unstable or recessionary business environment—one characterized by mergers, acquisitions, or disinvestment of businesses—training may be abandoned, be left to the discretion of managers, or become more short term (such as offering training courses only to correct skill deficiencies rather than to prepare staff for new assignments). These programs emphasize the development of skills and characteristics needed (e.g., how to deal with change) regardless of the structure the company takes. Training may not even occur as a result of a planned effort. Employees who remain with a company following a merger, acquisition, or disinvestment usually find that their job now has different responsibilities requiring new skills. For employees in companies experiencing growth—that is, an
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