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- Ways to Manage in a
Downturn
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By RICHARD P. DACRI,
The unemployment rate continues to creep upward.
Maine's September unemployment rate is 4.3 percent, up from the record
low of 2.4 percent set in March this year.
The number of new unemployment claims in the
state now exceeds 60,000. Employees are shocked as they see mounting
losses on 401(k) statements, while economists are now regularly using
the "R" word.
Is there any good news?
As the United States deals with a world crisis
and American businesses reel from a gloomy economy, business people
question how they can deal with these bad times.
Workers have greater uneasiness, resulting in
significant morale issues. Many employees are looking for security and
safety. The situation may not be good, but there are opportunities.
While some retrench, others are seizing
opportunity. Now is the time for businesses to develop a strategy to
navigate through bad times.
Here are some strategies to consider:
Focus attention on health insurance premiums, workers' compensation, and
absenteeism.
This year some health insurance premiums in Maine
rose between 23.5 percent and 32.6 percent. For next year, insurers are
requesting an additional increase of 13.6 percent to 31.7 percent,
depending on the plan and coverage.
With a tight labor market, many employers have
absorbed costs out of fear of losing employees. However, a study by the
Kaiser Family Foundation indicates that the trend is changing. Big and
small companies are likely to begin raising employee premiums. In
addition, we're beginning to see increases in employee deductibles and
co-pays.
Workers' compensation rates are slowly beginning
to increase. Yet the real concern is not the rates, but in losing
employees from injury. Studies show that though injuries do not become
more frequent in bad times, the length of time injured employees remain
out of work does go up.
After all, why give up your workers' compensation
checks and return to a workplace where your future may be very
uncertain?
Employers should therefore implement aggressive
case management strategies and modified duty programs to reduce this
cost.
Absenteeism costs can also be crippling. Absences
become even more painful when you already are understaffed. A Watson
Wyatt study estimated employee absences cost employers $3,050 per
employee each year.
Here again, aggressive case management and direct
supervisory involvement will minimize this problem.
Retain your key labor.
When we hear about massive layoffs, we sometimes forget we are still
in the midst of a labor shortage. For the last several years employers
have struggled to recruit and retain key workers. Can you now afford to
lose these people?
These key employees are the ones who will help you the most during
the tough times. They are the ones you'll need to turn to when the
economy turns around.
Now, more than ever, employers must focus on retaining these people
by investing in their development and providing them incentives to stay
(cash and nonfinancial).
Make every effort to develop alternatives to layoffs. Reduction of
hours, job sharing and furloughs are just a few. If layoffs must occur,
plan a careful strategy. Develop separation agreements and provide
laid-off employees with severance and outplacement assistance.
This strategy will help minimize the risk of lawsuits and send a
message to your surviving employees that you care.
Take care of your survivors.
These workers will be thinking that the company is in trouble and
their job is in jeopardy. Employers must be continually communicating to
the work force, reassuring employees individually if possible.
Nervous employees will jump ship for another opportunity if they
believe their jobs could be lost. On the other hand, don't tell them the
layoffs are over if they are not. These statements will harm your
credibility.
Increase your training.
Training is usually the first to go during a downturn. After all, who
can afford it?
Think again. Employers cannot afford to drop training. With fewer
people, employees need to be able to do more, and to do it more
efficiently. If you want to be positioned for the future, well-trained
employees are key.
Make sure your human capital is efficient. A good performance
appraisal system is essential to assessing employees' strengths and
weaknesses. If you find less-productive workers, training and coaching
may bring them up to par.
Focus on your supervisory development.
Front-line supervisors are essential to managing your work force
during any time, but particularly during the tough times. Provide them
with the skills they need.
Keep employees focused on organizational goals.
There is much to distract them and a clear focus is key to improved
motivation and increased productivity. Reinforce goals through
recognition and organize celebrations after successful events.
Keep all employees in the loop through continual communication.
Update them on the state of the economy and the future. Make them part
of the process.
Things may seem to be coming apart. Times are tough. But successful
organizations will navigate through these difficult times and find
themselves stronger in the end.
Rick Dacri is an organizational development consultant, coach and
featured speaker at regional and national conferences. Since 1995 his
firm, Dacri & Associates has focused on improving the performance of
individuals and organizations. Rick can be reached at 1-800-892-9828,
rick@dacri.com or www.dacri.com |
