Pundits predict that 2005 will be a year of increased job changing as pent-up fears over the economy and election uncertainties abate. Many smaller firms will be hit with defections as employees seek better situations in terms of salaries, benefits and work environment.

One key reason employees stay is healthcare benefits. Many workers remain in a position because of pre-existing medical conditions and various requirements of healthcare programs. However, two factors are contributing to changes in this powerful disincentive for moving. New rules on medical riders in employer healthcare plans go into effect on July1 and Health Savings Accounts offer a portable policy that moves with the employee. For these and other reasons, it is important that small firms understand what factors push good employees out the door.

A new book, explores "The 7 Hidden Reasons Employees Leave."

What Employers Must Do

According to author Leigh Branham, employers must:

  • Identify and communicate mutual expectations for their employees and themselves.
  • Create jobs that are good matches for employees and serve the company well.
  • Be proactive in coaching and develop feedback mechanisms to keep employees motivated and engaged.
  • Establish realistic and tangible advancement opportunities within the company.
  • Install pay-based and non-pay rewards systems that are geared to the company's sales and corporate growth objectives.
  • Look for signs of stress, overwork and burnout throughout the organization.
  • Build trust between employees and senior managers.

Experts agree that high employee turnover is a key factor in the failure of many small businesses. Branhan, a leading authority on employee retention, says that most firms focus on these areas only after suffering severe employee defection.

"By then, most of your truly good people have gone," Branhan says.

The book was developed in association with the Saratoga Institute and is available from your local bookstore or at a discount from our online bookstore.

As the economy continues to expand, keeping employees becomes more difficult for smaller companies.

New Rules In July

The new rule, which becomes effective for health care plans starting July 1, is meant to implement more of the 1996 Health Insurance Portability and Accountability Act by making it easier to obtain group health coverage.

It limits when preexisting medical conditions can be excluded from coverage and requires group health plans and group health insurance issuers to offer "special enrollment" in

certain cases.

The law, pushed through Congress by then-President Bill Clinton, was intended to guarantee access to health insurance for small businesses with 50 or fewer employees, and to require that insurers renew coverage for a person or group regardless of the health status of any member of the group.