(Fortune Magazine) -- Remember that classic nightmare - the one where you're back in high school on test day, and you suddenly realize you've never attended the class before? Well, managers have a recurring nightmare too: A star employee walks in and announces he or she is joining the competition. The trouble is, with unemployment at 4.5% - the lowest since mid-2001 - those HR nightmares are distressingly real. Consider, for instance, what HR consulting firm Compensation Resources Inc. found when it recently surveyed over 100 companies across a wide range of industries: Since 2004, the last time CRI took this poll, turnover among managers has jumped from 4% to 8.8%. Among salespeople it rose from 8% to 16%, and among skilled manufacturing workers it went from 7.5% to 17.5%. No wonder 75% of employers call turnover a "persistent worry." But there's an intriguing wrinkle: People's reasons for leaving are changing. In the 2004 survey, more money was the main motivator. This time around, most of the employees polled said they were after more responsibility or the chance to gain new skills. Other recent studies echo that theme (see charts below). The bottom line? Taking a hard look at turnover may actually benefit your bottom line. Just ask No. 48, SAS Institute, where employee turnover has never exceeded 5% - in an industry in which the average is 20%. According to a recent Harvard Business Review case study, SAS saves $75 million a year in recruiting, training, and other turnover-related costs, while spending considerably less than $75 million on benefits. For a look at how five other Best Companies are keeping their best and brightest happy, keep reading:
CASE STUDY
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Name Sue Sonday
Title Project manager
Tenure Four years
Best Benefit Sonday and her peers can set their own schedules and work from booths, couches, quiet zones--even their cars.
Capital One (No. 84)
Cubicles? How '90s! These iPod-toting workers live in a world without face time.
Chances are you're reading this sitting at your desk in an office. But if you worked at credit-card powerhouse Capital One, you'd probably be working in your car, at your kitchen table, or even in the waiting room at your dentist's office. You'd have a company laptop, BlackBerry, and iPod, and when you did want to go to any Capital One office, from Boston to Kansas City, you'd be walking into an open-plan space with no walls, where you could choose to plunk yourself down at a desk, in a booth, on a couch, or in a special "quiet zone" designed to eliminate distractions. Capital One calls this its Future of Work project. It's the brainchild of chief human resources officer Matt Schuyler, who is also in charge of real estate. The 4,000 iPods now in employees' hands can be used to download any of 10,000 different courses, many of them from Harvard and other top B-schools, as well as to tune in to internal company information like quarterly updates from the CFO. Since Capital One rolled out the Future of Work last October to 40% of its workforce, in-house surveys say that employee satisfaction has risen 41%. "I like being able to work from home at 6 A.M. before the baby wakes up, drop her off at day care, then stop at the gym," says Sue Sonday, a project manager in corporate technology. Adds Schuyler: "The world isn't a cube farm anymore."
CASE STUDY
Name Bill Klingelsmith
Title Talent specialist
Tenure 19 years
Best benefit Rather than rely on HR, Quad launched a new program, appointing vets like Klingelsmith to help hold on to workers in their markets.
Quad/Graphics (No. 75)
HR couldn't keep turnover down--so company veterans were asked to pitch in.
"You can be the best quarterback in the NFL, but you still won't win many games if you have to throw to a different wide receiver every week," says Bill Klingelsmith, a "talent specialist" at the Quad/Graphics printing plant in Martinsburg, Va. In mid-2005, Quad realized that what enticed employees to stick around in one location might not work elsewhere. So it appointed veteran employees like Klingelsmith to figure out ways to retain their own workers. One of the first things Klingelsmith did was to call people who had left to ask them why. Though he couldn't fix one big complaint (rising home prices), the second was a surprise: Ex-employees said they hadn't gotten enough training and had quit in frustration. Quad stepped up its training efforts, and Klingelsmith says, "We haven't heard that complaint from anybody in eight or nine months." Of course, hiring the right people is the surest way to beat turnover, and while studying the parking lot one day, it dawned on him that "our employees like to work on their cars." So he started handing out his card at car shows and NASCAR races. Since he became a talent specialist, turnover at his plant has dropped 30%.
CASE STUDY
Name Tina Swenson
Title Tax manager (on leave)
Tenure Seven years
best benefit As part of Deloitte's Personal Pursuits Program, Swenson is on a five-year sabbatical to raise her daughter. Deloitte pays for her AICPA license and training courses and will rehire her when she's ready.
Deloitte & Touche (No. 76)
When employees are in need of a big break, this Big Four firm is willing to let them go.
"Too often we were still hearing some of our best people say, 'Love the firm, love the clients, goodbye,'" says Cathy Benko, a principal in Deloitte's strategy consulting practice. Benko cites the statistic that 62% of women who graduated from her alma mater, Harvard Business School, leave the corporate world after their second child. Though Deloitte offered plenty of benefits like parental leave, adoption aid, and reduced work hours, it wasn't enough. So Benko came up with the Personal Pursuits Program, which lets employees leave for up to five years, receive training to keep their skills current, and eventually come back. Tina Swenson was a tax manager in the San Diego office who moved last year when her husband enrolled in Dartmouth Medical School. She also had a baby. Deloitte foots the bill for Swenson's AICPA membership and sends her to training courses to keep her CPA license current. "I can't say enough good things about Deloitte for doing this," she says. "It's made me very loyal." Meanwhile, since Deloitte began the program, Benko says, its dropout rate has plummeted. Five years ago the difference between the number of women and men who were quitting stood at 7%, or about the average for professional firms. Now it's zero.
CASE STUDY
Name Julian Duncan
Title Assistant brand manager
Tenure Six months
Best Benefit A recent MBA, Duncan enrolled in Nike's intensive management training program, which rotates him through six marketing assignments in 24 months.
Nike (No. 69)
At the sports powerhouse, employees are encouraged to plot their own destiny.
How many people at your company have had its logo tattooed somewhere on their bodies? Anybody? Evidently you don't work at Nike, where it's not at all unusual for employees to get the swoosh symbol inked into their skin (most often below the knee on the left leg--the lead leg for runners at the start of a race). Nelson Farris, Nike's director of corporate education, has been at the company for 33 years and designed most of the policies that inspire such devotion. "Figure out where you want your career to go, and when you see something that would help you get there, ask us for it," he says. That gospel is preached to new hires every 90 days, at a two-day pep rally that outlines Nike's growth and pumps people up to imagine their own role at the company. "You have to be a go-getter," says Julian Duncan, an assistant brand manager who is enrolled in a training program that moves him through six marketing assignments in 24 months. The rotation, as well as Nike's laid-back culture, means lots of exposure to higher-ups who can help him "navigate the terrain." On his second day at work, Duncan struck up a conversation in the cafeteria with legendary Nike co-founder Phil Knight. A few weeks ago he e-mailed a question to a VP, and "he gave me half an hour of his time, in person," says Duncan. "I think that's pretty unusual."
CASE STUDY
Name Brenda Fung
Title Intranet web designer
Tenure 13 years
Best Benefit Though she telecommutes and scaled back to 28 hours a week, Fung still gets the same medical, dental, life insurance, and retirement benefits she got full-time.
First Horizon (No. 46)
Being part-time at this bank doesn't mean you have to give up your benefits.
Two years ago Brenda Fung cut back her workweek to four seven-hour days, telecommuting from home on all but one of them. As an intranet web designer, she assumed she'd have to give up most of her benefits. So she was shocked when First Horizon, a financial services firm, said it would keep paying full freight for medical, dental, life insurance, and retirement benefits. She was even entitled to the same amount of vacation. "I was amazed," she says. Indeed, at a time when many companies are trying to scale back what they offer their workers, First Horizon's compensation chief, Ken Bottoms, keeps looking for ways to add new perks and improve the old standbys. "We bend over backwards to make part-time schedules work. We think it keeps a lot of good people from quitting." The part-time program, called Prime Time, operates at the discretion of supervisors, and about 90 employees are currently enrolled in it. Additional relatively low-cost benefits create a halo effect, Bottoms adds. "We offer adoption assistance, which seems to make people feel good about working here even if they have no plans to adopt," he says. Another example: First Horizon recently negotiated with its dental insurance provider to get employees' out-of-pocket expenses reimbursed faster. Fung is certainly a convert: "This company has been so generous to me. There's no way I could even think of leaving." 
