Hi Richard,
You are right on target with your response regarding the impact of the current economy on employee retention. If there are a number of employees who fall into the category of "unhappy," it might be worthwhile to do an employee satisfaction survey to see what is causing that unhappiness. So often we fail to ask our employees and that can lead to further unhappiness. Once we know, it is imperative that we make attempts to fix it. Employee dissatisfaction can be tied directly to student dissatisfaction and dropout problems.
Your experience with the high enrollments is typical in our sector when unemployment rates are high. The situation that you describe will have a positive effect on your student retention statistics and employee morale. It is important to show faculty and students alike that you value them so that those retention numbers remain high. Everyone wins in that environment.
Pat