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Building employee loyalty
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November 18, 1996: 8:20 p.m. ET
As layoffs increase, managers must work harder to keep good employees
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NEW YORK (CNNfn) - Despite a drop in the national unemployment rate to five percent, companies have laid off more workers this year than they did last year.
That means that managers have to work harder than ever to keep the loyalty of the employees who remain, said John Challenger Monday on CNNfn's "Who's In Charge" .
The smartest companies, in fields as far apart as advanced technology and fast-food chicken restaurants are instituting special programs to do just that because they know their future lies with their workers.
Challenger, executive vice president of Chicago outplacement firm of Challenger, Gray & Christmas, said frustrated, fearful, insecure workers will not go away, especially as the number of layoffs in the first ten months of this year are 20 percent higher than the year-earlier period.
Three million positions have been axed since 1989, said Challenger, and over 400,000 workers lost their jobs in the first ten months of 1996. And despite repeated hand-wringing over the issue of job losses in the presidential campaign, big companies show no signs of reversing the trend. (116K WAV) or (116K AIF)
"The forces that are driving downsizing - deregulation, technology, reengineering, and global considerations - are all continuing to cause companies to make downsizing decisions," he said.
Although many of those companies might add workers in other more productive areas, it nevertheless leaves wage-earners with bitter feelings towards management.
"When companies can't offer lifetime employment, they do need to find a way in this era of downsizing to create trust and get the commitment of their employees ," said Challenger, "because that's what makes them productive."
Motorola, he said, has a program where managers sit down quarterly with workers to assess goals and listen to new ideas.
Chick-fil-A, a fast food franchise chain, works to ensure employee loyalty with such simple measures as making sure all managers and employees are on a first-name basis, and having casual workdays, said Challenger.
As a result, turnover at the company headquarters is only three percent, and only five percent in the field.
"Companies need to find out where their business is going to be in the next decade," said Challenger, "and the way you do that is by listening to your employees, watching the market, and then growing in those areas with your people." 
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