With the economy still in intensive care and hundreds of companies handing out pink slips, many HR managers may be wondering whether to curtail their employee retention programs. After all, the reasoning goes, isn’t it foolish to focus on retention when the company is downsizing? Isn’t there little risk that employees will leave voluntarily when the job market is on life support? Isn’t it better to let employees leave to trim expenses?

The answer to all of those questions is no. In many ways, retention is even more important during a down economy. Just ask some of the companies who have recently lost the skippers they hoped would steer them out of troubled waters.

Playboy Enterprises, for example, just hired a new CEO away from one of the country’s biggest newspaper publishers at a time when struggling newspapers need strong leadership. MySpace hired a former top Facebook executive as CEO from a music startup that had recruited him only six months before.

Of course, retention programs aren’t aimed at C-level employees, but the same principle applies to middle managers and other key personnel. Retaining key personnel is imperative when the going gets tough. Abandoning or significantly cutting back on mentoring, training and development, and other retention initiatives is as misguided as going on a spending spree. There are a variety of reasons why.

1 – Layoffs actually increase voluntary turnover, often among your best performers. A recent study of 200 companies in the Academy of Management Journal found that companies that laid off a mere 0.5% of their workforce sustained, on average, a turnover rate of 13%, a rate that was 2.6 percentage points higher than the average turnover rate of non-downsizing firms. The bigger the downsizing, the greater the turnover. If you’ve had a reduction in force, you stand to lose even more people – including your stars.

2 – Talented employees are always vulnerable to recruitment. As Flannery O’Connor famously put it in her ironic short story title, “A good man (or woman) is hard to find.” Talent is always in demand, regardless of the economy. When opportunity knocks in the form of an attractive job offer, anyone who is even moderately dissatisfied will be likely to take it – and the defectors may be the very people your organization is counting on to save the day.

3 – You don’t have enough ‘fat’ to absorb further losses. Most companies have reduced headcount in some manner, whether through a formal layoff, an early retirement package, or a decision not to fill vacancies left by normal attrition. In this stripped-down environment, even requests for medical, maternity or sabbatical leaves can present a staffing challenge. Any additional vacancies caused by voluntary resignations may severely inhibit your organization’s ability to function properly. You may not have enough people left to take up the slack – at least not where you really need them.

4 – You need seasoned employees to help weather the storm. Even the best new hires can’t replace an employee who knows his or her way around your company, at least not over the short term. And the short term is what matters as organizations strive to maintain sales in a climate where customers are increasingly reluctant to open their wallets. Long-term employees typically can make a better contribution to establishing survival strategies than someone who is less familiar with your products and procedures. If you don’t want to lose your most knowledgeable people to another company, planting retention seeds is job #1.

5 – You can’t afford to let your ‘central connectors’ or ‘brokers’ leave. Certain employees do more for a company than the responsibilities included in their job descriptions. Central connectors are the ‘go-to’ people who can make things happen; brokers bridge the gap between departments. In a business downturn where fresh ideas must be implemented – often with a skeletal staff - these employees are especially valuable. If they leave, the social network that makes your company tick starts to splinter, lessening the organization’s ability to be nimble at precisely the time when you need it the most.

6 – Losing employees to a competitor can be particularly painful in hard times. Your competitors may be actively recruiting experienced personnel to help themselves survive the slump. If that is the case, the first place they will look will likely be in your organization chart. If they are successful in luring one or more of your workers away, you not only lose a good employee; you hand your competitor the keys to undercutting your own efforts in the market.

7 – Replacing departing employees is a bigger job than ever. Sure, you will have a much larger pool of applicants to choose from because so many laid-off people are looking for work, but therein lies the rub. Chances are you will be inundated by a flood of jobseekers at a time when HR is probably stretched as thin as the rest of your company. Weeding through resumes and conducting interviews is time-consuming and expensive in a normal business cycle; it can be overwhelming at a time when the U.S. unemployment rate is 9.4% with 14.5 million Americans out of work.

For all of these reasons and more, retention programs remain an essential investment. The key in this economy is to be sure that you are using the most cost-effective retention strategies.

Mentoring, for example, doesn’t cost as much as sending employees to training seminars. Corporate social networking tools can help nurture and retain younger workers, establish a sense of community that discourages turnover, and build more interdepartmental connections. Exit interviews should be still used to identify why people are leaving and provide actionable information to stem the tide.

In good times and bad, a company is only as good as its people. You have spent many years and untold sums training your employees and grooming them to rise in your organization. Curbing or suspending retention initiatives now may not only undo your past efforts but also hamper your company’s ability to ride out the recession as well as get back in the saddle when the recovery comes.

Beth N. Carvin is the CEO and President of Nobscot Corporation (http://www.nobscot.com), a global technology firm that focuses on key areas in employee retention and development. She can be reached at bncarvin@nobscot.com.