By Maria Anton

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Keeping high-performing employees on board is crucial for a small business. But the results of a recent survey show that the economic downturn has had a disproportionately harmful effect on the very top performers that employers need most.

The 2009/2010 U.S. Strategic Rewards Study from global consultancy Watson Wyatt and WorldatWork, an international association of HR professionals, reports that cost cutting by employers has led to a sharp decline in employee morale and commitment overall. But while employee engagement levels have dropped by nearly 10 percent for all workers at companies surveyed, they have declined by 23 percent for top performers.

Compared to last year:

  • 36 percent of top performers say their employer’s situation has worsened.
  • The number who would recommend others take jobs at their company has dropped by nearly 20 percent.
  • Top-performing employees are 26 percent less likely to be satisfied with advancement opportunities at their company.
  • They are 14 percent less likely to want to remain with their company instead of taking a job elsewhere.
  • They are 29 percent less confident in management’s ability to grow the business.
  • 41 percent think pay and benefit changes their employer made in the past year have negatively affected quality of work and customer service.
  • Only 35 percent say their employer rewards top employees for performance.

Although the survey polled workers at 235 large U.S. companies, small employers can still draw plenty of lessons. First, top performers are likely to be bothered by the same issues—cuts to benefits or pay—regardless of the size of the employer making the changes. Two, if your small business is offering some of the perks that top performers are not getting from large employers, you’re more likely to be able to attract those employees to your business.

What are some of the benefits top performers seek? Ryan Johnson, vice president of research at WorldatWork, says a “total rewards” approach is key. “Looking at all of the ways companies can motivate and retain–including compensation, benefits, work-life initiatives, and career development–is going to be essential.”