Holding onto your valued workers doesn't end with a competitive paycheck. It requires an environment of great management, open communication, empowerment, and recognition.

While the U.S. economy may be growing at a rate of 3 to 4 percent each year, employers are seeing a corresponding decrease in the availability of bright, talented 35- to 45-year olds. When you combine this statistic with the idea that at any given time 75 percent of the employees in a typical organization are at least passively searching for new jobs, you begin to see how a raging talent war is just around the corner.

If corporations can't stop the shrinking of the workforce, then HR executives and hiring managers are going to have to put greater focus on how to retain the talented individuals they have already employed.

According to Paul Glen, author of Leading Geeks: How to Manage and Lead People Who Deliver Technology, there are two forces at work in employee retention: engagement and coercion.

When employees are emotionally connected to their work, they are engaged. But forces outside an employee's control--such as policies and compliance--can either promote attachment to, or disengagement from, the company.

Where to start

Building a retention culture starts with an understanding that talented, high performing people are the foundation that leads to sustainable success. Great people need great leaders to guide them; thus, the goal of every company should be to ensure that leadership is not only top notch, but developed in all areas of the organization.

Know how your people feel

A few short years ago a poll of U.S. employees by Randstad revealed that 86 percent felt their happiness on the job depended on employers letting them know that they were valued.

I wondered how well companies were performing in relation to this expressed employee need. Sadly, recent statistics still indicate that approximately 70 percent of employees are actively or passively looking for other jobs. So it's fair to conclude that companies could do a much better job of letting their employees know they are valued.

It could be easy to point the finger at employers and assume that they don't care about their people. But we probably ought to look more closely at what employees mean when they say their happiness depends on their employers letting them know that they are valued.

One obvious way that employees feel valued is in the compensation they receive for the work that they do. But as multiple HR studies show, compensation is not the only driver of a strong retention culture.

Great compensation and benefits are important, but in the end, people choose to stay with their organizations for many more reasons than money. Here are some of the traits employees look for in a company:

Encourages ideas and contributions. Time and again, employees have expressed the desire to make a meaningful contribution at work. As individuals, they want to participate and contribute is ways uniquely their own. This requires that management adopt a lead and coach attitude, nurturing the creative talents of their people, rather than trying to force everyone into a "one-size-fits-all" approach to getting the work done.

Invests in management development. People continue to leave due to bad bosses, and with the talent pool tightening, you cannot afford to have managers pushing your talented people out the door. With people still saying that the number one reason they leave their jobs is a negative relationship with the boss, it's clear we have a long way to go. Engaging disengaged employees and retaining top talent requires that the people given management positions have the strengths needed to do the job.

Provides clear expectations. Define the required results and then let good people do their work. Managers who rule from a place of fear and insist on micromanaging will only find that they lose good people. Within reasonably established boundaries, be willing to let people tap their own unique and creative ideas to come up with innovative solutions to their work.

Invests in career growth and development. A commitment to offer ongoing training and development is an afterthought for far too many companies. Competition for talent is tight and it's going to get tighter. When you invest in your people, they are more engaged in their work and more likely to stay with your company. In an increasing complex multi-generational work environment this becomes even more important. Younger workers in particular expect their employer to help develop their professional skills. If you don't, they move on to someone who will.

Provides an environment that encourages life balance. Rightsizing, downsizing, tight economy, whatever the current challenge, employees are asked to do more with less. And they acutely feel the pressure to perform when layoffs occur and they remain behind. It is very important to provide employees the support they need when stress becomes too much, and leaders must model balanced behavior themselves. If managers are sending emails to employees in the middle of the night, while professing the need for work/life balance, I'm pretty sure employees won't believe a word they have to say.

Shows appreciation often. I recently read about a manager who actually believed that saying thank you for a job well done wasn't necessary. In his mind, receiving a paycheck is all the thanks an employee needs. That sort of attitude does one of two things: It drives people away altogether, or gives them incentive to do only the minimal required in their job. Either way, the company suffers.

If you want people to be engaged, care about the success of the business, and give more than the minimum they are expected to, say thank you--and sincerely mean it. If you don't, someone else probably will. Employees still reveal in surveys that they want to feel valued but mostly feel that they aren't; this suggests there is much work to be done on the retention front.

Finally

In the war for talent, companies that care about their people, invest in their development, prepare people to succeed as managers, set clear expectations, offer opportunities for increased responsibility and advancement, and say thank you for a job well done, are well on their way to creating a retention culture.