Rachel Brushfield, a director at Charlbury career coaching firm Energise, says managers should take care not to lose staff when the upturn comes Many employers in the last year have battened down the hatches, cutting headcount, freezing salary rises and bonuses, reducing hours, stopping recruitment, cancelling promotions and reducing training to save money.

During this time, senior managers have been able to do this because of high unemployment and a glut of supply of potential recruits, whereas before there was a talent shortage. The tide is turning.

But unless there is good leadership and internal communication, this can lead to a tide of discontent which, like a boil, will burst with staff leaving the company leaking its intelligence as the downturn lifts.

When unemployment is high, employees have no choice but to sit tight, but they have long memories about how they have been treated through challenging times, and will vote with their feet when the employment market picks up.

Also, with older employees needing to retire later to boost their pension, and younger workers hungry for fast progression, a stagnant yet frustrated talent pool can result.

Often line managers avoid tackling performance issues, so employees are promoted unfairly, again demotivating the cream of the workforce.

Now is the time, if they haven’t already, for companies to take action to retain their valued employees and engage them to prevent brain drain.

The cost of ignoring this issue is huge — companies simply cannot afford not to invest in employee retention, especially where there is a skills shortage, for example in engineering. In a knowledge economy, employees are the key to competitive advantage.

According to the Chartered Institute of Personnel and Development Recruitment (CIPD), Retention and Turnover Survey 2009, the average recruitment cost of filling a vacancy per employee is £5000, increasing to £6125 when organisations are also calculating the associated labour turnover cost.

This recruitment cost rises to £10,000 for senior managers/directors, so companies stand to have an expensive bill should they not make employee retention a business priority.

In adverse times, it is natural to be more risk averse, when actually what motivates 80 per cent of people is having more challenging work. Understandably, line managers want to protect their own position and prove their worth, so can be reluctant to delegate tasks to talent hungry for new and stimulating challenges.

The smart companies involve their talent in tackling business problems for a’ win win’ for employee and employer.

Career development and progression has been hard hit by the recession according to the CIPD. Only 24 per cent of employees agree they are learning new skills in their organisation as a result of the recession and only seven per cent agree there are more opportunities to progress.

Jack Welch, United States business guru, said: “The best people will move when times get better if you don’t treat them right. Human resources has to create an atmosphere where staff feel they are in charge of their own destiny.”

Simple things like saying thank you, asking unutilised skills, values and motivation and redesigning jobs, can re-energise employees and increase retention, preventing brain drain.

Communicating with employees is easy to push down the priority list with many other pressures on time.

The 2009 Best Companies research shows employee motivation and commitment are linked to good leadership. Where there is not a great deal of faith in the leader, just 40 per cent of employees are engaged compared with 93 per cent of those who have faith in their boss.

Job clarity is also important. Where people know what they are doing in their job, 88 per cent are engaged compared with 49.3 per cent when they are not clear. More than half of per cent of employees think increasing trust in senior management could be achieved by more frequent and honest communication and 35 per cent by more meaningful consultation, according to the CIPD.

Julia Iball, managing partner of leading Oxford law firm Henmans, said: “I'm very conscious of the importance of employee engagement.

“The difficulty seems to be that you have to engage different sorts of people in different ways and that is very time consuming.

My mantra over the last year has been communication. In a business where we supply a service, our people are our major resource and if we don't work to keep them happy and involved, that will be clear to our clients, and that will impact on their satisfaction.”

Given time and attention, a defined role, clear information and an inspiring leader, employees develop, thrive and reward their employer with loyalty.

Contact: Rachel Brushfield, Energise, 0845 22 55 010 Web: www.liberateyourtalent.com