Cutbacks creating witch hunts at work -- and very little net savings

Picture a department with a half dozen employees. They work together pretty well. It's a comfortable and productive group.

Then something changes. Someone in management decides that the best way to reduce costs is to eliminate an employee or two.

The word leaks out that someone is going to be cut.

And suddenly, that cooperative group of employees turns into a finger-pointing, fault-finding mob, all accusing each other of incompetence, malfeasance, or just plain stupidity. The witch hunt is on, and everyone is fair game.

And while such things can occasionally bring some relevant details to the surface, most of the time the "facts" about who's doing what, and who's been late and who made personal phone calls on company time have as much value as the crowd's logic in Monty Python's Life of Brian as they accuse a village girl of being a witch...



In the meantime, work doesn't get done, customers are ignored, and the company risks lawsuits for all kinds of things ranging from discrimination to harassment to creating an unsafe workplace.

From one HR pro to another, I am here to tell you that it just isn't worth it! Sure, there are times when a cutback is absolutely necessary. And in those cases, it needs to be done quickly and with chance for rumors to start.

But most of the time, the savings from eliminating a person are more than offset by the cost of lost productivity and higher turnover among those left behind. Unfortunately, most managers don't know it.

Training managers in the real versus short-term savings

As part of your management training program, address the cost of cutbacks. Teach managers how to weigh in factors like lost work hours, reduced productivity levels and higher error rates among survivors. Make sure they understand the price of a jump in turnover, as people scramble to move to someplace where they will not be "next on the list."

Workplace flexibility muscles through recession

Despite the recession, a majority of employers have maintained or increased their workforce flexibility programs. Recent research shows that more than a quarter of employers (26%) are used workplace flexibility programs in attempts to avoid layoffs in the last year.

The Impact of the Recession on Employers (.pdf) by the Families and Work Institute measured a variety of trends including how employers are reducing labor and operational costs, and how employers are helping workers deal with the recession.

"It is hardly surprising that our survey finds that 77% of employers are cutting and controlling labor and operational costs during the recession," said Ellen Galinsky, co-founder and president of FWI.

"What is surprising is that that between 34% to 43% of employers are actively helping employees weather the recession, that employers are largely retaining or increasing workplace flexibility as way to manage through a difficult economic environment, and that 57% of employers are giving employees some or a lot of input about the flexibility they use."

Other notable survey findings include:

• Two-thirds of employers (66%) report a decline in revenues in the past 12 months. More than a quarter (28%) said revenues held steady and 6% saw increases in revenue.
• Employers’ two most common cost-cutting strategies were decreasing/eliminating bonuses or salary increases (69%) and lay-offs (64%).
• Most employers have maintained existing workplace flexibility options (81%) or increased them (13%). Another 6% had to reduce flexibility options.

The report also revealed how some employers have turned to their employees for ways to improve the business and cut costs. The most popular methods included a cost-savings program where employees submit cost-savings ideas and organizing active cost committees to make recommendations.

“Employers are increasingly recognizing the value of work-life balance policies to their bottom lines - now we see it's true in good times and in tough times," said Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee.

"Offering flexibility to workers is a low-cost way to boost morale, loyalty, and productivity. This new report by the Families and Work Institute, confirms that smart employers are working with their employees to avoid layoffs. More employers should see these policies as an essential element of the 21st century workplace.”

How has your company helped employees get through the recession? Did they use workplace flexibility programs and/or other employee benefit programs?

Please leave a comment and let us know.

Go ahead, leave work earlier today. It’s a holiday.

Today is the 5th annual “Leave the Office Earlier” day. No, we’re not making this up, you can read the press release.

Productivity expert and best-selling author, Laura Stack created the holiday based on the idea that most employees are dealing with increasingly heavier workloads by spending significantly more time at work. “Leave the Office Earlier” day is a way to get employees and employers to agree to limit their time at the office to eight hours, at least just for a day.

New productivity statistics show that most of us could probably use a break. During the first quarter of 2009, U.S. workers, who are already the most productive in the world, improved productivity by 1.1 percent in the business sector, according to the U.S. Bureau of Labor Statistics.

"Given today's economy, the eight-hour work day will probably remain a myth to working Americans for the foreseeable future," says Stack. "June 2nd isn't about playing hooky or ditching work sooner. It's an opportunity for people to focus on changing work patterns, adjusting priorities, and engaging in conversations to find ways to achieve work/life balance while improving workplace productivity."

Another study by Corporate Voices for Working Families, revealed that workplace flexibility benefits employers and individual employees in such areas as productivity, customer service, employee work-life effectiveness, stress and well-being.

Eight out of ten employers and employees surveyed also said flexibility is important to recruitment and retention. Additionally, flexible schedules and innovative time-off policies help companies become an “employer of choice” for younger workers, according to the study.

Whether you think it needs an official holiday or not, workplace flexibility is quickly growing as a popular benefit that many job hunters in today’s labor market are looking for. But with the recession thinning out offices and putting more work on a smaller group of employees, some are finding it harder than ever to take that much-needed break.

Maybe a holiday like “Leave the Office Earlier” day is exactly what we need. What do you think?

Will you be participating in “Leave the Office Earlier” day? Do you think we should recognize the day each year? Or do you think we should stop watching the clock and get back to work?

Companies restructure faster by firing and hiring, not retraining

As many of the country’s largest employers eliminate thousands of jobs, they’re simultaneously hiring workers for new positions to adapt to the market’s changing needs, according to a Wall Street Journal article published yesterday.

U.S. employers eliminated 539,000 jobs in April alone, said the Labor Department on Friday. However, the government also estimates that employers hired roughly 4.4 million workers in February, the most recent numbers available.

"It's not just routine turnover," says Lori Kletzer, an economics professor at the University of California, Santa Cruz. "Quite often the people being laid off don't have the requisite set of skills or experience to move into the growth areas."

Some experts say the churn also shows changes in workplace policies. In past decades, many employers retrained and relocated underused workers, says Peter Cappelli, director of the Center for Human Resources at the University of Pennsylvania's Wharton School. “Now they've discovered that you can restructure even faster by laying off and hiring.” (WSJ)

Microsoft, IBM, AT&T, Yahoo and Time Warner are among the companies laying off thousands, while hiring new workers to fill positions in different business units, other places or to fill a need for new skills.

These latest employment numbers support a belief that many Americans currently share -- without continued training and skills development, their current workplace skills will be outdated within the next few years.

Workers across all generations depend on training and development to stay competitive in the changing labor market, but more than three-quarters of Americans believe the training provided by their employers will fail to meet their future career needs.

Has your company decided to fire and hire, instead of training existing employees for new positions? Is it the employer’s responsibility to develop workers’ skills for their future career needs?

Leave a comment and let us know what you think.

Are you living to work or working to live?

A new survey examining the health and well-being of Americans discovered that the majority of people value their work for more than just the paycheck it delivers by asking: Do you live to work or work to live?

As the U.S. economy struggles through a recession and companies lay off hundreds of thousands of workers, CIGNA conducted the survey to explore attitudes toward work and disability insurance, along with the effect the economy is having on work environments.

Key findings of the survey include:

• Americans have a strong work ethic and derive satisfaction from their jobs.
• Americans feel unproductive, worried, afraid, anxious and depressed when they’re out of work because of an injury or illness.
• Most say the overall mood in the workplace has changed in the past six months – and most say those changes have been for the worse.

When asked about how they viewed their job, those surveyed revealed that:

• 65% would say they belong in the “Live to Work” category
• 35% put themselves in the “Work to Live” category
• 31% like their job and feel a sense of satisfaction by going to work each day
• 21% love their job and would continue working even if they won the lottery
• 13% said their work give their life structure and purpose

Among those who work to live, survey respondents said that it was the paycheck or insurance benefits keeping them at their current job. Many felt stuck because of the economy or had hopes of retiring soon, but can’t afford to.

The most common reasons why respondents felt they live to work: they like their co-workers, feel a sense of accomplishment from their job, are proud of their work, or feel their work makes a difference.

“The good news for U.S. employers is that most people say they enjoy their work and derive satisfaction from it,” said Jodi Prohofsky, Ph.D., a licensed therapist and senior vice president of health solutions operations at CIGNA. “On the other hand, the economy is causing more stress and anxiety among workers, and we know that stress can often contribute to or lead to disabling illnesses, so it’s important for employers to help their employees manage stress and anxiety before that happens.”

Earlier this week we talked about how employees desire more in-person communication with top management in their organizations. Making employees a part of the conversation during tough times is one of the most effective ways to help employees manage the stress and fear that typically comes along with organizational change.

Effective communication can have a powerful impact on morale within an organization. Though you may be navigating some rough waters right now, focusing on communication and employee morale will have you smooth sailing when everything finally calms down.

So, the question is: Do you work to live or live to work?

Change puts engagement and productivity at risk

More than one-third of employees are unable to adapt to workplace changes, decreasing their effectiveness on the job and suggesting that employee engagement and productivity are at high risk, according to a recent survey by Right Management.

Right Management asked more than 100 senior human resource professionals across North America: Is your workforce able to adapt to change and increase their effectiveness on the job?

• 31% answered, “No, employee engagement and productivity are a major risk”
• 43% answered, “Somewhat, our workforce gets the job done, but morale suffers”
• 26% answered, “Yes, our workforce is very agile and responds to new challenges”

Among other changes, layoffs and organizational restructuring require leaders to make difficult decisions that many employees have trouble dealing with.

"As our poll results demonstrate—with only one in four employees having the agility to adapt to change—most organizations don’t prepare their employees to handle changes at work. As a result, change management strategies tend to fail, undermining the organization's ability to achieve the goals the change initiative was designed to produce," notes Right Management President and COO Douglas J. Matthews.

Matthews also commented that most hardships originate from a lack of planning, preparedness and skill in managing the change process. It is only through careful planning and with support at every level of an organization that employees will be able to manage change effectively.

Though the causes of workplace change can vary, there are a few basic concepts that every manager should review to help reduce its impact on engagement and productivity:

• Communication. Keep communication lines open and inform your staff of upcoming changes as soon as possible. Having clear expectations is one of the most powerful ways to reduce workplace stress.


• Participation. Involve employees in the decision-making process whenever you can. Involve your staff in managing the change and ask for their input when implementing new procedures or training programs.


• Provide positive options. If a negative change, like a layoff, is unavoidable, offer employees something positive to balance out the situation. For example, implementing an employee development program for the remaining staff after a layoff can help improve productivity and relieve stress.


• Monitor progress. Monitor the progress of your staff throughout the change. Keep an eye on productivity, attendance records, turnover rates, the use of sick leave - anything that may suggest your team is not adapting well.

Whether your organization is moving offices or has gone through a series of layoffs, communication is the key to making sure employees are managing stress effectively. Managers must listen, learn and take action to replace negative situations with positive experiences.