Having a group of happy, loyal and productive employees is every business owner’s dream. But it’s inevitable that things in business go wrong. Morale can suffer for reasons as diverse as declining sales, layoffs and managerial stress levels.

And when morale drops, productivity drops. People start looking for other work. And soon, you’re replacing your best workers. But if you know why people leave, you can be proactive about solving the issues and giving them incentives to stay.

Why do employees quit?

They don’t feel connected to the company: Many managers keep employees in the dark. They don’t share information about financials or the big picture. They keep their vision for the company and their own department to themselves. As a result, employees have little sense of why they are important to the company. They don’t feel compelled to make a difference—which is very important to most people.

Their work does not motivate them: Plenty of people work for low pay in jobs they love, because they get something of great value out of it—self satisfaction, or external praise for their contributions. But many employers expect workers to be motivated just by their paychecks. It takes more than financial compensation to attract and retain the best workers.

They don’t enjoy themselves at work: Your company may not be a fun factory, but that doesn’t mean people can’t find enjoyment in their work. Engaging employees in new ways can go a long way toward that. Offer flexible hours. Eliminate the dress code. Encourage workers to decorate their cubicles and offices to reflect their personalities. Learn from innovative employers like Google and Zappos.

They see no career path: Do you provide a way for employees to work their way up from their current positions? If so, is it clearly understood by them? If workers feel “stuck,” they will look elsewhere for some upward mobility. And sadly, many employees report that they don’t know if their companies offer any way to move up.

If you have valuable, talented employees that you want to keep, you can help them stick around by paying attention, offering them more than a paycheck and making them part of the company’s success.

Employees come and go; that’s just a fact of having them. But that doesn’t mean employers shouldn’t take steps to keep the good ones. Retaining good employees is good for business in many ways. It saves money on recruiting, hiring and training. It helps keep productivity high. And retaining good employees is good for morale.

And then there’s the other side: is it fair for employees to search for new jobs while they’re at work? Should employers have to pay their employees to find a new employer? Obviously not.

That’s why it makes sense to know the ways employees might be looking for new jobs while working for you. First, you might be able to interrupt a great employee’s job searching activities and find ways to keep him or her. Second, you can be open with job searchers and remind them they need to work for you—not look for work—while they’re on the clock.

Here are a few things employers can do to see if employees are job searching on the job:

• Check social media profiles: If employees are updating their experience, skills or recent accomplishments, it could be a sign they’re starting the job search.
• Pay attention: Look for changes in habits. Employees who suddenly wear dressy clothes could be interviewing, as could those who usually eat at their desks who are suddenly taking long lunches away from the workplace. If early morning interviews or coffee meetings are taking place, staffers who typically arrive at 8:00 a.m. might start coming in late.
• Look for a drop in productivity: For workers who use computers all day, it can be difficult to know what they’re actually doing. Is George preparing those budget forecasts or catching up with online networking contacts? Is Elizabeth preparing shipping documents or applying for jobs? If their work output is lower than usual, it’s time to check in.
• Job-searching employees who are more production-oriented may be away from their workstations more often, taking phone calls in private or borrowing other employees’ computers to check email or online job site activity.
• Monitor employee activity: Employers are allowed to monitor employee use of computers, Internet, email, telephone, etc. After all, you’re paying for the equipment, the utilities, and the building, not to mention paying the employees to be there. Do you really want them taking care of personal business—like searching for a new job—on your dime?

Remember that what employees do on their own time (even interviewing on their lunch hour) is their own business. But if they let job-searching bleed over into their work time, it becomes the employers’  business.

Believe it or not, your employees might be blaming you—or your company, or their jobs—for the problems they’re having at home. And what’s more, when they feel that work or the boss is a burden in their lives, it could cause big problems.

It’s important that employers care about what or whom their employees blame when they have family problems. The associated anger and frustration often leads to negative workplace behaviors, such as missed work, low productivity and employee theft.

Instead of being hit with a problem you never saw coming, try being more proactive with your employees’ workplace satisfaction. Here are a few tips to get you started, which could pay off in a big way!

Schedule in advance: Last-minute meetings and must-attend work events cause stress for families, especially when schedules are already so tight. Encourage everyone to put in for vacation time far in advance so planning is easier on spouses and partners. Try to avoid last-minute meetings and don’t require employees to attend every single work-related event.

Listen and empathize: Create a company culture that cares. If an employee is having trouble balancing work and family obligations, don’t disregard them or the importance of finding a solution. Employees who feel heard and understood will appreciate and remember it—and may even be more inclined to volunteer for extra duty when they can. In any event, they’re likely to be more productive and happier on the job.

Don’t discriminate: Whatever you do, don’t assume that only women have family needs to attend to. Just as many men blame work issues for family conflicts, and employees of both genders want to attend their kids’ softball games, school plays and ballet recitals. Be mindful that employees who are not parents have other obligations, too. Don’t expect them to always be available or to pick up the slack when parents run out the door to make it home in time for homework help. Be respectful of all employees and the unique family needs they each have.

Any business that survived 2009 is positioned to improve in 2010. Hopefully, lending will loosen up, enabling businesses to invest in equipment or facilities. Hopefully, job losses will halt, employment will tick up, and consumers will again have cash to spend.

If your planning for next year includes adding employees, it’s a good time to reflect upon your most important asset—human capital—and plan on how you’ll inspire your people to perform at their best, while keeping them enthusiastic and productive about their work and your company.

Effective teams of workers are not happy accidents. In the leadership role, business owners and managers directly affect the performance of their teams. Hiring the right people and placing them in the right position on the right team is a delicate, but necessary practice. If it’s done well, your business will run better and more profitably.

Asking the right questions starts before the hiring process does. Ask your current staff what additional personnel they would hire, given the chance. Ask what they need. Ask what’s working and not working in their current team relationships. Listen well, and ask for input. Have a brainstorming session. While your employees may not have all the answers—or even many usable ideas—it’s important they feel included in the process. And usually, the workers on the ground are acutely aware of what’s lacking in their world.

During the hiring process, look for attributes that will fit in well with established teams. This doesn’t mean that your staff cannot work with someone who doesn’t share their musical taste or hobbies. It’s good to have a diverse group of people working toward a common goal, so everyone contributes his or her strengths. While skills can be learned, enthusiasm, a positive outlook, and passion to do well cannot. Debbie Downers will often bring everyone around them down, too.

Acknowledge and quickly deal with conflicts as they arise. It’s part of gluing a good team together. Certain rules, like fostering a sense of mutual respect, should be adhered to. Let your team know that open communication is always okay, and they’ll be more likely to put conflicts behind them.

Take the time to find the best people, thorough sound procedures, including pre-employment screening. Turnover is costly both in terms of dollars spent and goodwill lost when team members have to deal with new hires more than they should. Nurture your new hires, integrate them fully, and provide all your people the resources they need to succeed. Spend time and effort in 2010 to keep your most valuable asset—your people.

Even Google, a company famous for its happy work environment and revolutionary business model, has trouble keeping good employees. If it wasn’t the fun, start-up atmosphere and valuable stock options that kept everybody motivated, the unusual perks did. Who wouldn’t love to work where you receive free bus service, free gourmet meals in the company cafeteria, on-site gym and dry cleaners, and a pets-allowed policy?

But lately, high-level and midrange employees have been jumping Google’s ship for newer start-ups like Facebook and Twitter. And Google is not taking it lying down. They have been crunching the numbers and developing formulas that can predict which of its 20,000 employees are thinking of moving on. Google is looking at employee reviews, promotion history, and pay scales, among other factors, and says the new algorithm has identified employees who feel underused—a big reason for employee dissatisfaction.

It’s nice to have the big data-crunching companies out there spotting trends that can help businesses run things better.  So, what can employers can learn from Google’s example? 

Keep Employees Engaged
Many companies concentrate on the customer—and that’s a good thing. But too much attention to one side of the equation can lead to disaster on the other. Employees want to know that they are just as important to a company as the customers, the financial statements, and the economy. They care about their contributions, and if they feel underused, productivity could be affected fast.

Ask employees—often—about how they feel about their position and its importance to the company. You may discover that you and your staff have very different views on the subject.  It’s up to the employer or manager to come up with ways to keep employees challenged and engaged, and to re-evaluate these efforts on a regular basis.

Reward and Appreciate
It’s so easy to overlook this aspect of managing employees—especially in a difficult economy. Many employers feel that they’ve done enough by providing jobs and that alone should be enough appreciation. And to some employers, reward comes in the form of a regular paycheck.  Fair enough! But if reward and appreciations is proven advantageous to the company’s bottom line, it might be enough to convince even the most resistant employer to make the attempt.

Certainly the cost of hiring employees affects a company’s profit. Advertising, recruiting, interviewing, and training are time and money drains on any business. Avoiding that expense by keeping good employees is simply a smart business decision.

One example is Nugget Markets, a small regional grocery chain in California. With a 12% turnover rate, they are well below the industry’s average of 20%. Their culture includes providing employees with free food, dance parties, field trips and bonuses helps to keep 900 staff people feeling appreciated. 

For Nugget Markets, efforts that let their team know they’re valuable has helped keep turnover at a level their competition can’t touch.

Learning from the big guys is something employers of every size can do. Try keeping employees engaged and challenged, and make them feel appreciated. Remember that what’s good for your staff is good for your company’s bottom line, too.