Funny things happen when times get tough. Issues that seemed critically important a year ago—like the war for talent, employee engagement and the mass retirement of baby boomers , has just fallen off most managers’ radar in the Recession of 2009. You don’t hear many people talking about these topics all that much anymore, because stuff like that kind of goes by the wayside when your business is struggling and your major worry is just survival and keeping people employed.
Instead, we’re getting bombarded by all manner of things having to do with cutting costs and keeping things going until the turnaround comes. For example, how many of you were talking about furloughs at this time last year?
For example, the nation’s largest newspaper company, Gannett (corporate parent of USA Today) did so well in saving $20 million in the first quarter of the year by requiring unpaid employee furloughs, that the company “mandated a second round of unpaid furloughs for most of its 41,500 worldwide employees, this one during the second quarter,” according to the independent Gannett blog.
I worked as a top editor at Gannett newspapers in Montana and Hawaii during the mid-1990s, but these furloughs are way beyond anything I experienced while working for them.
And that’s something to keep in mind: Furloughs are one of those management tricks that seems to be spreading like a Southern California brushfire because it’s a way for an organization to cut costs without actually going through the emotional and financial toll of cutting staff.
It also gets into the notion of shared sacrifice because it spreads the pain across everyone in the workforce. Employees intuitively understand that. They would rather sacrifice a little if it helps one of their colleagues keep a job, but I don’t see a lot of organizations touting that as one of the “benefits” (if that’s the right word) of a furlough.
Yes, “a forced furlough is better than losing a job,” as Frank Ahrens notes at Web site The Big Money, “but it leaves already-at-risk employees feeling even more powerless, buffeted about by bosses and balance sheets.”
The story is well worth a read because it pitches an interesting notion: turning the concept of unpaid furloughs into a series of three-day weekends.
“Why a three-day weekend? Why not? We’re Americans. We love three-day weekends. … Employers could save billions in salary expenses—savings that could prevent layoffs and free up capital for growth or to aid the company’s balance sheet,” the story says. “[And] workers could use their furlough weekends to add a second income. They could turn a hobby into a business or startup and maintain a largely self-perpetuating business, such as property management or any number of online businesses.”
But, there’s another compelling reason for considering the concept of the three-day-weekend furlough: It gives “employees a measure of control over their fate. If an employee is laid off or furloughed, the employer sets the terms. The employee feels powerless. The furlough weekend would go a ways toward changing that.”
This is a “nontangible benefit” for workers, as the story points out, but the potential savings for employers can be substantial—$261 billion in total payroll savings (based on 2008 numbers), if each of the 154 million full-time employees in the U.S. took 10 furlough weekends per year.
That’s the best-case savings, of course, but even a fraction of workers doing this—say, 10 percent—equals about $26 billion in annual payroll savings. That’s a huge chunk of money and would go a long way toward helping to get American businesses back on track again.
I don’t know if this is a viable option, but it is a very intriguing and interesting notion. It is the kind of thinking that elevates the concept of furloughs from just another “me too” business trick to a strategic business practice for bosses and employees to thoughtfully discuss. And given today’s economy, we need to be having a lot more of those discussions than we’ve ever had before.
There’s one good thing about tough economic times (if you’re willing to say there are any good things): It makes people have a greater appreciation for what they have.
Nowhere is this truer than in the world of employee benefits, because we’re seeing more and more evidence that many perks workers used to take for granted, and perhaps even felt entitled to, are now the very things that they have come to really count on and appreciate as the economy tightens up.
“In this environment, benefits are taking on a heightened importance for most workers. They are more actively involved in managing the benefits provided by their employers, says a new study conducted by MetLife,” and reported in The Arizona Republic.
“MetLife’s 7th Annual Employee Benefits Trends Study said 46 percent of workers surveyed say they are taking a greater interest in understanding the benefits they get through their employer,” the story said. “More than half say they appreciate the benefits more than ever before and 41 percent said their workplace benefits are the foundation of their financial security.”
What’s interesting to me about this MetLife study is that the company felt the need to do the survey twice—first in August and then again in November—because of “the recent volatility in the markets.”
Clearly, MetLife felt that data and opinions collected in the relative good times of last August just wouldn’t be representative of how workers feel today. And although I applaud MetLife’s decision to re-survey in November, I think the findings would probably be even more pronounced had they done taken them again—perhaps in February—after the economy REALLY took a nose dive.
You get a hint of this from the concerns workers expressed in the study.
“A third of workers are worried that their company will cut benefits in the next 12 months,” the Republic story said, “although the study shows only 15 percent of employers said they planned to make such cuts. This also indicates that company officials recognize the importance of benefits to worker morale—39 percent of employers believe that workplace morale is strongly linked to the quality of employee benefits.”
“Focusing on retirement has taken on a bigger role for many individuals. Six out of 10 employees say they have been motivated to look at the level of income they’ll need in retirement. That figure rises to 73 percent for Baby Boomers, participants born between 1946 and 1964 … [and] the biggest concern, cited by 65 percent of workers, is affording health care in retirement. The second biggest worry was a tie between outliving retirement money and having the money to care for a spouse’s long-term needs, both issues cited by six in ten participants,” the story added.
I don’t find it surprising that employees are more appreciative of their benefits, because most workers who still have jobs are concerned with keeping those jobs and all the perks and extras that come with it. That hasn’t really changed, but what has gotten people’s attention is the notion that losing a job doesn’t just mean losing a paycheck.
It also means losing health care, dental and eye coverage, paid vacation and probably access to a retirement plan. If those benefits were taken for granted in the past, they certainly aren’t anymore, at least not in this economy.
“Employees are looking more and more to the workplace for advice, education and guidance so they can make better decisions about their benefit programs … to help them craft a financial safety net for themselves,” said Bill Mullaney, president of MetLife’s institutional business.
Yes, benefits are one part of the safety net that workers depend on, in both good times and bad. It sometimes takes something like a huge economic downturn before people finally really appreciate what they have—and what they should never, ever take for granted again.
“As times get tougher, many are turning to freelancing and contract work, transforming a trend that was once a lifestyle choice into a matter of economic survival,” the story says. “Frustrated trying to find full-time work, more people are piecing together a living doing projects, consultancies and part-time gigs from home for an outside employer.”
Freelancing has long been a lifestyle choice for many who wanted to work on their own schedules, doing what suited them. But beyond that, freelancing has always been a refuge for people who, for one reason or another, found they just didn’t fit neatly into the daily workplace.
I’ve known people who were impossible-to-manage lunatics in a traditional work setting who suddenly became mellow, professional and productive after they went the freelance route. There is one guy who freelances a little for Workforce Management who used to work with me as a staffer at a daily newspaper. In that environment, he was terribly unfocused and unproductive. And while I don’t know how he works at home, when he writes for me now, he hits his deadline most of the time and is a pleasure to work with. That’s not something I could have said when we worked together in a traditional boss-employee structure.
What is interesting to me about the Miami Herald story is how it captures the growing trend of freelancing as a legitimate option for so many of today’s unemployed. “Today, the new project-to-project, paycheck-to-paycheck economy crosses the spectrum from low-wage workers to highly paid professionals in a variety of industries,” the newspaper says. “People are finding short-term work on job boards, websites, professional associations and even from former employers.”
For those who take up freelancing by necessity, not choice, it can be a far-from-perfect option, of course. Without an employer, no one is there to pay for health benefits, sick days, coffee or wifi, for example. But it does beat the alternative of cat food atop a Ritz cracker.
And how many people are we talking here? No one really knows, but the Herald story says, “Not counting the recent surge, freelancers made up 30 percent of all workers, according to the Freelancers Union.”
I suspect that this 30 percent number doesn’t take into account all the people who may be poking around the edges of freelancing, folks who have lost their jobs and are toying with the option. Plus, people move in and out of freelancing as their personal situations change. I’ve known a lot of new mothers who used freelancing a short-term solution in the battle to balance a new baby and the need to get back to work.
“The big question,” the Herald story asked, “is whether this trend is long term or whether freelancing will fade as the economy strengthens and full-time jobs become available.” I don’t think there’s a good answer for that, but I do know this: If people can be successful working for themselves without the BS you get in a traditional workplace, I bet they’ll be more than happy to kiss that old daily workplace life goodbye.
Motivating workers to get healthy is a tricky business.
Anyone who manages people these days knows that there is a tremendous effort by a lot of organizations to get employees to take better care of themselves and ultimately save the company money through lowered health care costs.
“Among those paid up to $750 to quit and stay off cigarettes, 15 percent were still tobacco-free about a year later,” according to the AP story published in the Fort Worth Star Telegram. “That may not sound like much, but it’s three times the success rate of a comparison group that got no such bonuses. GE was so impressed that it plans to offer an incentive program nationwide next year, aiming to save some of the company’s estimated $50 million annually in extra health and other costs for employees who smoke.”
This all sounds good, but I wonder: Will financial incentives to help workers stop smoking or work harder to stay healthy be a line item that avoids getting whacked out of the budget during these tough times? Yes, you can point to a pretty nice ROI in the GE study, but how many organizations will really look at it that way and not just focus on the upfront dollars it takes to encourage the cost-saving behavior?
“Each attendee’s four trips per month to make a trip to the sauna and catch up on sitcoms as they gingerly touch the pedals of a recumbent bike is never, never, ever going to make a dent in your health care or absenteeism costs,” the blog post noted. “I don’t care what anyone else tells you.”
In my book, it’s worthwhile to pay smokers to quit because it ultimately will help the organization make a big dent in health care costs, as GE has found. My guess, however, is financial incentives like this one will face the budget knife in most companies this year.
It’s not that organizations don’t see the benefit in helping employees to get healthy. I think they do. But the issue for many will be a lack of focus on the long-term ROI when the more pressing issue is just keeping things going through this terribly difficult year.
I read a lot of news stories in the course of a day, and I am often surprised and amused about what I find buried deep down in some of then.
Here’s an example: According to Florida’s St. Petersburg Times, “the new Belgian owners of Anheuser-Busch Cos. announced Monday that Busch Gardens will end a 50-year tradition and stop handing out free beer samples.”
OK, that’s just another corporate cutback at a time when corporate cutbacks are a daily occurrence, but if you read past the Busch Gardens’ visitors bitching about the loss of their free beer, you bump into this little nugget: “Ditched in the same fell swoop with free samples: a longtime monthly perk to full-time park employees of two free cases of Anheuser-Busch beers.”
In the world of benefits, this is a throwback to the 18th and early 19th centuries, when workers got daily alcohol rations as part of their pay. It was an accepted part of many jobs back then—in factories and the military, for example—to get beer or alcohol on the job. It was as accepted then as a free parking space is for many workers today.
What surprises me is not that the free employee beer is being cut at Busch Gardens, but rather, that anyone in America in 2009 would still be getting free alcohol as a perk. And it just goes to show you that there are all sorts of odd and unusual benefits out there. From Google’s free meals to Florida companies offering spiritual and faith-based services to employees, managers and HR executives are dealing with company perks that bring their own unique issues with them.
This also reminds me of the last time I encountered beer as a benefit. It was in Hawaii, of all places. When I moved to Honolulu in the mid-1990s, my neighbors were kind enough to clue me in on an odd but longtime New Year’s tradition: putting out beer for the garbage men.
This was one of those word-of-mouth things, but every New Year’s Day in Honolulu, the garbage workers came by to pick up your trash. Friends and neighbors warned me that you were expected to put out some beer for the garbage guys to both thank them for their hard work and to ensure that your trash got picked up efficiently over the next year. And we were warned that NOT putting out the beer was not really an option. By not observing the tradition, you just made sure that your trash would never, ever be treated kindly again.
No one seemed to know exactly how much beer to put out, but everyone agreed that it needed to be at least a case, and preferably two, in order to accomplish the desired goal.
So, I got up early that first New Year’s Day in Hawaii to see how this was all accomplished. Around 7 a.m., the garbage truck came barreling down the street, as usual, with workers picking up the weekly trash with their usual skill and efficiency. What was different on this particular day, however, was that the garbage truck was followed by a large pickup truck with two guys picking up the cases of beer that had been carefully placed on the curb next to the trash cans.
It was an incredibly efficient operation—and very unlike what you got out of so many public workers in Hawaii. But it did show the power of a timely and focused workplace benefit.
So farewell to the free beer for workers at Tampa’s Busch Gardens. It will surely be a benefit sorely missed and fondly remembered.
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