In the April 2008 issue of FORGE, my column was entitled “Finding Good Employees.” The title of that piece spoke for itself, but it ended with a promise that a future column would deal with retaining them. With this column, I am glad to finish the theme started in last April’s issue.

In these challenging economic times, news headlines abound with stories of massive employee layoffs by major companies. The reality is that we have an employer’s market right now. Most employers with jobs to fill these days are being inundated with resumes and applicants. Ironically, news stories about huge numbers of applicants lining up to fill jobs are becoming as common as stories about layoffs and company closures.

So why, you must be wondering, are we dealing with this topic in an economy characterized by high unemployment and numerous job applicants? The answer is simple: The retention of strong employees is good management practice, and the results of good management yield benefits in weak economies as well as in strong ones.

It is in the long-term best interest of employers, and their bottom lines, to implement policies that help retain valued employees. A survey done by Robert Half International, a specialized staffing firm, indicates that employees considered good performers by their bosses leave because of limited advancement opportunities (39%), unhappiness with management (23%), lack of recognition (17%), inadequate salary/benefits (11%) and other reasons (10%). This indicates that compensation, though obviously important, is not the primary reason valued employees leave. In fact, the top three reasons, which account for eight of 10 employee departures, are items over which management exercises significant control.

Given this information, it is reasonable that policies such as promoting from within your organization, increasing and improving lines of communication between management and employees, and offering positive reinforcement (whether financial or other recognition) when you catch somebody doing something above and beyond their job description can go a long way toward improving stability in your workforce. Some of these activities should be coordinated by your designated human-resource executive or department, with full recognition of the fact that whether you employ two people or 2,000, the attention paid to human resources should vary only by degree, not in intensity.

Recognizing that unions and labor contracts can limit management’s flexibility in some areas, it is still management’s responsibility to cultivate a corporate culture that encourages cooperation, dignity and respect in the workplace.

Whether or not your shop is unionized, the time for adversarial relationships has passed. Given the realities of a global marketplace, investors and workers alike can no longer afford this approach. To paraphrase a great politician, the main thing to remember is that neither management nor labor can properly function if each is frozen in the ice of the other’s animosity or indifference.