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The Human Element
By: Kathy Goodin-Mitchell, BA, MS, SPHR
Issue: 2009jun
How are you managing your employees through the lifecycle of business?
The life of a business has four different stages affecting employees in significant ways. Business owners and managers must plan their strategies and take a serious approach to manage the four stages and the effect each has on employees.
Stage 1: Growing
If your organization is fortunate enough to be hiring employees, you know finding creative and inexpensive ways to recruit is top priority. You can harness the power of technology and post jobs on search engines such as Yahoo! HotJobs, Monster, CareerBuilder or job bulletin boards specific to the promotional products industry. You can also use more traditional methods.
Recruiters are still out there seeking business. Today recruiters are hungry for opportunity unlike any time since the 1980s. Remember, there are contingency recruiters getting paid only if you hire the candidate provided versus retained recruiters who get a retainer to work the opening. Some will argue contingency recruiters cost less since they don’t get paid until the candidate is hired, but retained recruiters will take a portion of the fee up front, working diligently to finish the job for the remaining fee. The added cost you save in time and effort makes the retained recruiter an option worth considering.
Networking is a less expensive option and still one of the best ways to find new talent. Seek out anyone and everyone who may have a connection in the expertise you need. Use web-based job boards, social networking sites and local professional groups liberally. LinkedIn, Facebook and other web links are good options these days, especially for younger candidates.
Businesses in the growing stage need to become the place in which everyone wants to work. Publicize your benefits, bonus options and other eye-catching compensation extras. Also, honor your current employees by treating them well. A good reputation will not only drive candidates to your door, but will produce new business leads. Use your positive growth as a tool to recruit, improve employee relations and make your company an employer of choice.
Stage 2: Holding Steady
If your business is holding steady then you need to take every opportunity to show how much you appreciate your staff. A 2009 survey by Adecco Group North America (AGNA) shows 78 percent of employees like their jobs. Employers need to respect that appreciation by providing timely, honest communication. As stated in the AGNA survey, employees need to see commitment and management actions showing total transparency concerning competition and state of business. It’s no longer acceptable to keep business dealings locked behind boardroom doors.
In addition to improved communications efforts, employers should offer new benefits or perks. With pending state and federal changes in healthcare, there may be options available for small businesses through local Chambers of Commerce, state programs and regional health insurance organizations. If you can afford to provide employees added benefit options such as training, flex time, paid parking, commuter pools, job hunting assistance for spouses, etc., do it now.
Some employees are hurting economically as much or more than businesses. Many homes are now a one-paycheck household instead of two because of layoffs, cutbacks, closures and lack of work. It is helpful when business leaders acknowledge the impact the economy is having on workers and alleviate the strain when possible. By putting creative programs in place while the economy is tough, you show how much employees mean to you. Employee loyalty still exists, but businesses have to earn it.
Stage 3: Downsizing
The decision you make will have an impact on the future success of your organization, so it is important to understand the dynamics of your staff, business needs and future measurements of success. Consider options other than downsizing your workforce by cutting 401K matching, moving to an HSA instead of a standard medical plan or getting volunteers to work fewer hours in favor of keeping everyone on board. You may also consider taking a pay or bonus cut at the top levels. As stated in an October 2008 article in BusinessWeek, do as A.E. Schmidt did in the 1930s—if you have to make a cut, be willing to take one yourself and take it first.
To begin any downsizing, review all employee files for annual evaluations, performance warnings, attendance and awards. Be honest with yourself as to how well each employee works to make the organization successful. Ask yourself, “Is he or she dedicated to the business and does he or she represent well to outside clientele and inside staff?” You want to be sure to keep those who meet the needs and requirements as supporters in your survival.
(A little hint: Whenever employees face these types of situations, they know who the best workers are, who has the best attendance and who deserves to stay or go. You should not necessarily look to employees for guidance here, but there is a sense of fairness that permeates the process management sometimes overlooks.)
During a reduction in workforce (RIF) determine all factors to be used up front. For example, you can downsize based on tenure, which is usually the easiest decision and keeps your long-term staff in place. However, with a tenure-based plan you may lose newer staff members who are pumping excitement into the organization. Define what nondiscriminatory factors will be used. Age, gender, religion, ethnicity, etc. must never be used in employment decisions while performance, attendance, skills and experience are all good points to consider. Be fair and transparent in your process providing good communications each step of the way. Remember, whatever factors are used, your decisions must be defendable, accurate and reasonable.
In addition, if the business meets certain conditions, there are specific rules governing workforce reductions or plant closings stipulated by the Warn Act of 1989. For example, employees must receive a written notice 60 days before the date of a mass layoff or plant closing. The U.S. Department of Labor provides a general outline of conditions for companies that meet the requirements:
“A business with 100 or more full-time workers (not counting workers who have less than six months on the job and workers who work less than 20 hours per week), or employs 100 or more workers who work at least a combined 4,000 hours a week, and is a private for-profit business, private nonprofit organization or quasi-public entity separately organized from the regular government.”
For further details concerning the Warn Act of 1989 go to www.doleta.gov/layoff/pdf/WorkerWARN2003.pdf.
Keep things fair and legal as you make your way through the tough spots. Remember there are employees who will remain on staff effected by and reflecting on your actions.
Stage 4: Closing
In the worst stage of business life companies face closure. So what do you do for employees in this situation? Do everything you can afford. Be fair to all while meeting your business obligations. A good reputation in the community will be determined by your final actions internally and externally.
If your company is governed under the Warn Act, a business closing is defined as follows and requirements exist for notifying employees:
“A plant closing is where the employer shuts down a facility or operating unit within a single site of employment and lays off at least 50 full-time workers.” More details are available at the above website.
If you are a small-business owner the Warn Act may not be a factor for you, but the principles could be used to make the transition more palatable for your employees, such as giving early notice and being specific about when, why and how the closure will take place. Full honesty is required.
While many see the Chamber of Commerce as useful to new or ongoing businesses, it can also help in a business closure situation. The Chamber may have suggestions on how to plan a closing and to obtain additional support from local, state or federal agencies. In addition, the Chamber or other organizations may know of companies eager to hire dedicated employees like yours.
While the employer seeks help through the courts or service organizations, employees need to be considered in every way for aid, job placement, continuing benefits through COBRA and in every way possible. As one of the last employer tasks seek outside services offering assistance to employees, communicate about those services and prompt employees continually with good information. Understanding is the first and last thing we can offer.
While business owners continue to work through challenging economic times, most businesses transition through at least three of these stages repeatedly. If your business is not currently in a favorable stage, remember at some point it will most likely flourish again. Keep prepared and be positive for whatever may come.
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