Happy Monday.  As you read this, I’ll be on my way to Atlanta and then Quito, Ecuador where I’ll be conducting the opening and closing keynote addresses at the country’s first national compensation and benefits conference.  This is the third of six speeches (conferences) I’ll be conducting over the next three months… I’ll be headed to Lima, Peru for a two-hour workshop on Thursday, then back to Lima in a month for a breakfast meeting, and then Rio de Janeiro & Sao Paulo Brazil and maybe a final speech in Buenos Aires, Argentina.

Whew.  It’s lucky I love to travel, and even better that I get to bring my older son to Quito and Lima with me on this trip.  We hiked the Inca Trail in 2000, and although we won’t get to Machu Piccu this time, it will be nice spending a week together as he begins his life after graduating University.

Learning about Ecuador

Like many parts of the world, the last five years have been both feast and famine for the people of Ecuador.  Ecuador is substantially dependent on its petroleum resources, which have accounted for more than half of the country’s export earnings and one-fourth of public sector revenues in recent years.  From 2002-06 the economy grew 5.5%, the highest five-year average in 25 years. The poverty rate declined but remained high at 38% in 2006. In December 2008 the government defaulted on some commercial bond obligations while the government decreed a higher windfall revenue tax on private oil companies, then renegotiated their contracts to overcome the debilitating effect of the tax. This generated economic uncertainty; private investment has dropped and economic growth has slowed.  When oil was over $100 per barrel, dollars flowed into the economy.  However, the last couple of years have taken quite a toll on the country.

The unemployment rate was roughly nine percent in 2008, and has risen in 2009 as oil prices continued to slide.  The Gross Domestic Product is about one-sixth of the GDP in the US ($7,200 vs. $45,800) while the  GDP growth rate has been about the same as here in the states (two percent).

The topic of my speech is “Compensation and Benefits In a Crisis Economy”.  The fact is that employers in Ecuador are dealing with many of the same issues as we are in the states.  Stagnating or decreasing salaries, rescinding or postponing bonuses, cutting health-care costs, eliminating contributions to pensions and 401(k)’s.

So, what’s the theme of my speech?

It really hasn’t changed.  Money impacts retention but not engagement.  If you want (or need) your employees to do more with less, you need to concentrate on Engagement, not retention.  Just ’cause someone stays with an organization doesn’t mean they are willing to go the extra mile for customers or doubt negative information they hear in the press.  Just ’cause an employee is likely to stay with the organization for the next two years doesn’t mean they are likely to be highly motivated to work hard, be active members of their team, or stop talking to head-hunters willing to pay them a little more money to leave their company and go to another.

Companies need to concentrate on engaging their workers.

So, take a little quiz and see how you do…

1)  Do you know which workforce engagement components are the most critical to your employees or a specific job family or job function?

2)  Do you know how your employees rate your performance in those areas?

3)  Do you know what it costs to replace just one worker in your organization?

4)  Do you know the annual replacement costs of workers in your company?

5)  Can you calculate the impact of unengaged workers on the productivity of your employees?  Can you put it into dollars and cents (ok, that was two questions for the price of one)

6)  Can you tell senior management what percentage of your employees are putting customer retention at risk, by job, by department, or by branch?

Six simple questions.   Contact me at marc@employeeholdem.com and let me know how you did.  Or email me if you didn’t get at least four of these questions answered.  You’ll be glad you did… and it won’t cost you a dime.