Question

A downturn in the economy has resulted in reduced funding. Recently other nonprofits have entered the field and are vying for the same financial resources, resulting in employees working longer hours in a fierce competition to earn grants.

Key areas in the most recent employee engagement survey dropped significantly, citing the long hours and pay inequities. In contrast, however, employees were quite pleased with the benefits that are offered, the positive work environment, and recognition for their corporate social responsibility (CSR) work.
How should the HR director manage the threat of key employees being recruited by the competition?

A. Recommend that the CEO meet with mission-critical employees individually to reiterate their value and commitment to organizational and individual success.
B. Recommend that the organization offer pay increases through performance bonuses to all key/mission-critical employees.
C. Ask the CEO to wait to see if anyone else leaves. It is too soon to be concerned, since only a few employees have left.
D. Recommend that the CEO send out an e-mail communication to all employees thanking them for their dedication and hard work.

Answer 1

To manage the threat of key employees being recruited by competitors amid an economic downturn, the HR director should consider direct, personal communication from the CEO and potentially address pay inequities through performance bonuses, balancing this with benefits and CSR initiatives already valued by employees.

Step-by-step explanation:

The Human Resources (HR) director facing the challenge of key employees being recruited by the competition amidst a downturn in the economy should consider a multi-faceted strategy. Given the reduced funding and competitive pressure for financial resources, the HR director could prioritize employee engagement and retention by adopting a more personal approach. Recommendation A would allow the CEO to meet with mission-critical employees one-on-one to affirm their value and recommit to their individual and organizational success, aligning with a modern understanding of employee motivation which values meaningful work and a supportive work environment. Simultaneously, it would be prudent to address the concerns of pay inequities possibly by considering performance-based bonuses or raises (Recommendation B). However, this should be balanced with the recognition of benefits and CSR initiatives already valued by employees. It is advisable to act proactively rather than deferring action (C) or relying solely on broad communications (D) which may not address the specific concerns or signals sent by employees considering departure.