Commentary & Analysis
Creating Opportunity Out of Adversity
Published: April 30, 2009
Adversity: Something that is a cause for suffering or special effort, especially in the attainment of a goal; e.g., “Some overcame all the adversities of the Great Depression and rebuilt their fortunes.”
Merriam-Webster’s Online Dictionary
The current bad global economy has raised anxiety over employment in employers of all sizes and employees at all levels. While the workforce picture is undeniably worrisome, the most resilient professionals are practicing a variety of rebalancing measures to get them through the present adversity and distinguish themselves as key contributors to – and beneficiaries of – the recovery. The following article outlines some of these best practices that are likely to yield optimal long-term results for both employers and employees:
Suggestions for Employers
Companies have had to respond very quickly to the rapid business decline that some of them are experiencing. The initial concerns it has raised are obvious: is there and will there be enough work to sustain the company’s current head count?
Head count is a very critical consideration for any business. Printing-industry matrices define dollar-volume sales per employee broken down among factory staff and value-added employees. Already over the past several years, productivity initiatives at the forefront of strategic business management have “right sized” many operations. So now in today’s economic slump, companies that have already accomplished “right sizing” face the dilemma of potentially having to cut below bone. Our advice for coping with this dilemma is to adopt a rational and analytical approach by evaluating and then reconciling your business volume benchmarks, your plans for the future, and the skill sets required – collectively with, of course, your current financial position.
The profitable delivery of print and ancillary services is a knowledge-intensive venture. Employers are more acutely aware than ever of the levels of hard skills and experience they need to maintain a viable workforce. Thus, for new hires, PrintLink works with our client companies to uncover candidates who will arrive with as much of the requisite knowledge and skills as possible. Additionally, although it has always been important to invest in training, in our current challenging times it is more critical than ever. So we advocate the regular in-depth review of job descriptions and their accompanying skill requirements, then maintenance of a practical plan to fulfill both.
Complications for Succession Planning
Just now another challenge for company management is the new complexity of developing and maintaining a succession plan. Our past articles have already discussed the fact that Baby Boomers—people born during a period of elevated fertility after World War II between 1946 and 1964—are approaching retirement age en masse, while the successive generation of people born between 1965 and 1981 will number only about 58% of the presently available workforce. So as the Baby Boomers retire, a lot fewer people will be available to work.
Although current devaluation of investments in a fluctuating stock market may have postponed the mass Boomer retirement temporarily, it will still occur eventually. Therefore, employers must offset their present staff cuts with consideration of the successors they will ultimately need to replace outgoing retirees.
The Employer’s Goal in a Nutshell
PrintLink’s prevailing message is to maintain and hire for your defined right size. This concept entails not only head count. It is also a careful consideration of the number of people required, their specific levels of skill and experience, plus an inventory of the type of outlook and flexibility they need to execute your business and succession plans.
Heightened Employer-Employee Communication
A recent Ipsos Reid poll has determined that one quarter of Canadian workers are concerned about holding onto their jobs. An Ipsos Reid spokesperson confirmed that this concern is evident at all status levels, from managers to technical specialists to workers on the floor. Likely it would be equal or greater in the U.S.A., where in February 2009 the Labor Department reported 168,000 job losses in the manufacturing sector.
In such an economy, alleviating employee anxiety is critical, and being perceived as acting responsibly is also essential in maintaining effective communications between owners, managers, and staff. Take an introspective look: if you’re a company owner or manager, are you doing a good job of initiating both direct and factual communication? How are you demonstrating your own commitment to carefully managing discretionary spending? If you’re an employee, is your employer allaying your concerns or at least being truthful about what could lie ahead? Are you doing your part to make a difference? As a species, humans gravitate toward group activities--families, communities, businesses, schools, churches, clubs, organizations. We pitch in naturally for the common good. But as individuals we like to trust that everyone involved in a particular endeavor is doing his or her share.
The workforce has recently demonstrated a collective willingness to contribute to workplace sustainability. In recent months, employees have been asked to make concessions such as pay or benefit cuts, job sharing, or assuming additional work, to name but a few. And of course, many have experienced temporary or permanent layoffs. Aside from the obvious, a significant concern for employees in this situation is fear of being blindsided. Job candidates tell us that, whatever is coming, they would like to hear about it as far in advance as possible. We therefore recommend that employers provide staff with maximum advance warning of adverse changes to their job or economic status. While staff do recognize that some uncertainties can catch their employers off guard, they nevertheless need and deserve sufficient time to make the necessary personal adjustments before being hit by negative financial changes.
In general, where feasible, we also recommend engaging staff in the process of change. For example, consider employers who need to curtail the growing costs of employee benefits. Many are adopting a flexible approach that offers each employee a series of options instead of one across-the-board package. Employees are thus able to select those options they want and decline others. Often there is a base package at a dollar value that a company will cover, giving the employee the additional low-cost option of adding more. We feel that employees gain a greater appreciation of the benefits they ultimately receive if they have had a hand in customizing the revised package themselves.
An employer who wants to recruit or retain top-performing candidates but who cannot at present offer a higher salary may be able to negotiate alternative forms of compensation; for example, a bonus incentive plan or higher commission, stock options, car or cell-phone allowance, or an earlier salary review date. And although we would never advocate that either party coast indefinitely on promises, in certain cases it may be practical for employers to extend a promise of future professional growth to select candidates once the economy turns around. PrintLink regularly helps both employers and employees conduct these types of negotiations to reach mutually sustainable win-win agreements.
Perception is Everything
In these trying times, employees’ perception of management’s fairness is also critical. Both sides are under stress; but if employees have agreed to concessions such as salary cuts and have witnessed their co-workers being laid off or terminated, they are watching for corresponding visible concessions by company management. In these instances, employees who have adjusted to downgrades in lifestyle want to see those who have asked them to make these sacrifices doing the same thing. Recently, when implementing a company-wide payroll reduction of 5%, Suri Suriyakumar, President and CEO of American Reprographics Company, provided a role model by taking a voluntary 50% salary reduction himself. At the same time, the company’s CFO Jonathan Mather cited the importance of accomplishing reductions without major disruptions to customer service or any unnecessary decline in staff morale.
Among other highly visible concessions that will satisfy staff’s sense of fairness are decreases in executive entertainment and travel budgets. If a senior executive’s car lease has come up for renewal, he or she can earn staff’s esteem by downgrading the vehicle. Company executives who decline bonuses, yet still roll up their sleeves to put in extra time and effort toward the growth and longevity of the company, are held in high regard both internally and externally.
Most employees have already downgraded their high salary expectations and sense of entitlement to perks; but candidates who register with us nowadays express a concern that the assets they bring to the table will be undervalued in today’s market. A fine line exists between compensation plans and concessions that are equitable for the economic times and ones that take unscrupulous advantage of people who desperately need a job.
In the current soft economy, where businesses are seeing flat or declining revenue growth and downsizing, it is no wonder that many employers feel that hiring is a buyer’s market. Because certain jobs are now surfeited with qualified workers vying for fewer positions, some employers even feel they can try to hire better qualified employees for lower rates of pay. Employers also need to hire top producers who can achieve positive results, even in a slow economy. Hence a trend is growing towards lower base salaries with bonuses or incentives based on attained objectives.
In response, job seekers should anticipate that employers may be more exacting. Candidates may need to research the current market rates for their specific jobs and geographic area, since employers have no reason—and indeed may be unable to--offer higher wages than these markets warrant. Besides knowing their own minimum salary requirements, job seekers also need to be honest up front with their search consultant or prospective employer as to what figure will determine whether they accept or decline a job offer.
Even in a stronger job market, salary negotiations are among the worst possible arenas for games that waste everyone’s time. The best course for job seekers is to establish clear goals and pursue them consistently, rather than accepting interviews randomly for the sake of seeing how far they can go and what the offer will be—or worse playing it against a counteroffer from another prospective employer or their current boss.
Job applicants who genuinely deserve higher compensation relative to a job’s standard current market value should be prepared to justify the difference in terms of: “If you offer me what I am requiring, you will specifically receive x, y, and z from me, thus gaining a significantly higher return on your investment.” It must be clear precisely what differences in their knowledge, background, or skills warrant the increase in compensation. Often job seekers are not attuned to communicating the full extent of their strengths, so PrintLink works with candidates to identify and document not just their professional abilities but also the value those abilities deliver.
Honorable Give & Take
The response the economy requires from employers and employees is, more than ever before, an honorable give-and-take relationship. Owners and managers should frequently reassess their workflow requirements and determine how many people and of what skill and experience levels they require, what job functions they can combine without undue risk, and what they need to do to finance these staffing decisions. Inviting employees to participate in this all-important endeavor can further the process considerably by uncovering mutually workable solutions that will help solidify a sustainable, growable business plan.
Please offer your feedback to Mike firstname.lastname@example.org or 800-867-3463