When demand exceeds supply, you’re in a talent war. We experienced one in 1999, and after four years of an economic-induced armistice we’re about to see another one emerge with a vengeance. The upcoming talent war has been called the “perfect storm” by industry experts because it will be created by the confluence of three factors:

1) A healthier economy and brighter job market spell more options for good workers…

·        According to a CareerBuilder.com survey conducted in May 2005, three-fourths of hiring managers state they have added workers over the last six months. And, four-in-ten hiring managers plan to hire between 1 and 10 workers during the third quarter, 22 percent expect to add between 11 and 50 workers and 17 percent expect to add more than 50.

2) Unhappy employees complete with updated resumes and packed bags are on the market…

• 20,000 new resumes are being posted daily on Monster.com and 6 million job seekers hit the site (which features more than 800,000 job postings) daily.

 3) Changing demographics indicate a shortage in skilled workers…

• According to the US Bureau of Labor Statistics, the US workforce could experience a shortage of 3 to 6 million workers by 2012 largely due to the fact that one half of US workers will be eligible to retire in the next decade and one third of Canada’s population will reach 65 by 2011.

Why is the impending talent war important to you? Because the cost of turnover is high – really high. In fact, experts across the board agree that the cost of replacing talented workers can easily average one to two times their annual salary – not including the indirect costs of lost knowledge, declining morale, lost customers and rising inefficiencies. 

Take the example of a client who recently experienced the loss of a Java Programmer salaried at $85,000. 

The cost of this resource’s departure, including vacancy, exit interviewing and processing, and severance costs totaled $9,485. The cost to recruit a replacement, including recruiting and interviewing time, candidate travel and expenses, and escalated salary and benefits equaled $28,390. The cost to train the replacement added up to $6,570 and the cost of lost productivity during the 90 days it took to locate the replacement equaled $40,545. And with lost sales due to the vacancy estimated at $56,600, the total cost of losing this Java Programmer was $141,590 or 180% of the Programmer’s salary!

The bottom-line is that every talented resource you retain prevents you from losing dollars from your bottom-line…

So what can be done to deter your talent from walking out the door for what they perceive to be greener pastures? The Wall Street Journal’s bestseller, Love Em or Lose Em: Getting Good People to Stay (co-authored by Career Systems International’s founder and CEO Beverly Kaye) features 26 tested strategies you can use to engage and retain talent.  If you adopt only one of these strategies, we believe the most important one is the first one: “ASK!”

That’s right; ask your employees why they stay or what would keep them – so you don’t have to guess. Asking could mean the difference between retaining and losing your most valuable resource, especially in this information-age economy. The simple act of asking an employee what’s important to him or her has many positive side effects. The person you ask will feel cared about, valued and important. Many times this will lead to stronger loyalty and commitment to you and your organization. Just the process of asking the question is an important retention strategy in itself!

How and when should you bring up this topic and how can you increase the odds of getting honest input from your employees? Well, there is no single best way or time to ask. It could happen during annual reviews or bi-annual developmental discussions with your employees.  And it could happen during an informal discussion about why a particular employee chooses to stay. The important thing is to be sure it happens and that you listen and take action.

Details on the remaining 25 strategies can be found at www.keepem.com.  We encourage you to visit this site today and to consider the significant return on investment that retaining top tech talent offers. 

For example, if you have 100 tech employees with an average salary of $70,000 and 20% turnover, this turnover rate can result in a one and a half million dollar deduction to your bottom-line! It’s clearly worthwhile to elevate retention to a core business initiative today.