Six Months after Katrina, Staffing is Still a Challenge for Employers on the Gulf Coast

By Jessica Marquez

Feb. 27, 2006

It’s been six months since Hurricane Katrina swept through the Gulf Coast, and many employers in the region are still struggling to figure out how they can staff their operations to get them up and running.

Many companies have repaired their stores and facilities, but have been forced to keep limited hours because of staffing shortages. There’s very little housing in the area, and without it, companies are hard-pressed to find workers.

“The population has shrunk significantly,” says Myrna Shultz, vice president of marketing and development for Strategic Restaurants Acquisition Corp., which franchises 227 Burger King restaurants on the Gulf Coast. “Everyone is fighting the same battle, and it’s harder than ever to keep employees.”

To deal with these challenges, companies are relying on tactics such as supplying housing, offering flexible hours, giving hiring bonuses and recruiting former staff to fill vacant positions.

Companies also are planning on what they’ll have in place before another disaster strikes. On the most basic level, that can include permanent emergency contact numbers for employees to use and pay cards that can take the place of payroll checks. In a more profound way, companies like Entergy, which supplies power in the region, plan on letting employees know that it will be acceptable–and necessary–to break rules in future crises, as long as the company’s values and culture stay intact.

Entergy has indefinitely moved its headquarters from New Orleans to Clinton, Mississippi. It is keeping operations running by relocating employees and maintaining communications with them. Of the 2,000 employees in the areas affected by the hurricane, only 1,000 have houses that are inhabitable, says Jennifer Raeder, director of human resources at Entergy. Raeder, whose home got 18 inches of water, doesn’t expect to be able to return until June. Even then, however, she may not return.

“It’s a very different New Orleans right now,” says Raeder, who is now working out of Entergy’s Jackson, Mississippi, office and living in an apartment supplied by the company. Many people feel like Raeder does about the city, making it even more difficult for employers to anticipate who in their workforce will be ready or willing to come back whey they do open for business.

Entergy could reopen its corporate headquarters, but without housing and transportation within New Orleans it’s impossible to work, Raeder says. For now, the company is redeploying employees to other locations and allowing many to telecommute.

So far, Entergy has redeployed 900 employees to cities like Jackson, Houston and Little Rock, Arkansas, and has 100 people telecommuting. The company has put other employees in temporary housing.

To oversee this process, Raeder and her staff made some cold calls and identified eight Entergy retirees who live in the areas where workers were being redeployed. Because they are familiar with Entergy’s culture and processes, they’re able to get the redeployed workers settled, Raeder says.

“These redeployment coordinators helped employees get apartments, utilities hooked up and rental furniture,” she says. “Now they are acting as a liaison between the employees and the company to make sure we have a consistent approach among all redeployed workers.”

Housing race continues
Many companies–like Sodexho, a food and facilities management services company based in Gaithersburg, Maryland, and Las Vegas-based casino operator Harrah’s Entertainment–are reopening facilities in the affected areas and are racing to secure housing for their employees.

“It’s particularly difficult because there are still a lot of areas where there is no electricity or running water,” says Peter Gerard, senior director of human resources for Sodexho.

To address this, Sodexho has teamed up with low-income housing providers and hotels to secure housing for some employees. Still, there are 200 employees looking for housing. Getting these employees places to live is crucial, as more of Sodexho’s clients, such as Tulane University and Loyola University, have reopened.

Harrah’s Entertainment, which had three casinos and 8,000 of its 90,000 employees in the areas affected by Hurricanes Katrina and Rita, has established partnerships with real state companies to secure housing for the 1,500 employees who lost their homes, says Jerry Boone, regional vice president of human resources.

On February 17, Harrah’s reopened its New Orleans casino on a scaled-down basis with 1,600 employees. The company hopes to eventually get the casino back to full capacity with its pre-hurricane workforce of 2,500 employees, Boone says.

The company is taking into consideration employee performance in deciding who comes back to work first and gets the housing, he says. “There is no shortage of interest in employees who want to return,” he says. As for its other casinos in the affected areas, Harrah’s is rebuilding its Biloxi, Mississippi, property and selling its location in Gulfport, Mississippi.

Similarly, New Orleans-based Hibernia Bank, which had 3,150 employees living in the affected area, has found hotel rooms for more than 200 employees who were able to come back to work, says Michael Zainey, executive vice president and director of human resources. Hibernia was acquired by Capitol One just weeks after Katrina.

So far, Hibernia has reopened all but 20 of its 320 branches in the region. The problems of housing and lack of infrastructure remain, however, and Zainey estimates that five Hibernia branches cannot open because there is no place for employees to easily live nearby.

Hourly challenges
Recruiting and retaining employees has been taken to a whole new level of complexity for employers of hourly workers. At Strategic Restaurants’ franchised Burger King locations, there have been instances of competitors walking in and recruiting employees while they are working behind the counter, marketing VP Schultz says.

“We realized we had to do something and we had to be creative to retain people,” Shultz says.

On October 1, the company implemented a hiring bonus program, giving as much as $6,000 per year to full-time employees who stay a year. Part-timers can receive $3,000 for staying 12 months. So far, 85 managers and 1,594 crew members have been hired under the plan.

But now Shultz and her team are being forced to come up with a new plan. Competitors like McDonald’s have begun matching its offers, she says.

The company is considering offering housing as part of its recruitment and retention strategy. For example, an employee who agrees to stay on for a certain period of time would be guaranteed housing. But the company has not yet made a final decision, Shultz says.

McDonald’s has started offering $50 hiring bonuses to employees, but is trying to take a more long-term approach to the staffing shortage, says Steve Russell, the company’s senior vice president of human resources. The company has made its salaries “very competitive with the market,” he says. He declined to say how much the company is paying hourly workers in the area.

The company is offering flexible hours to workers, and all of its franchisees have elected to offer employees access to the employee assistance line as well as the company’s Gold Cards for free. The cards give employees discounts at 60 different retailers.

For its part, Hibernia has always offered hiring bonuses on a case-by-case basis, but in the wake of Katrina, prospective hires are bringing the topic up more often, the company’s Zainey says. “Potential employees have a little bit more leverage,” he says.

Entergy is experiencing different kinds of challenges in staffing redeployed positions, Raeder says.

“It’s very hard to get someone to accept a job when you can’t say where the job will end up,” she says. For example, there are about 20 positions open at Entergy’s Jackson office, but those jobs could all end up back in New Orleans.

Lessons learned
As companies try to return to business as usual, they are also reviewing what they did in the months after the hurricanes to figure out what they could do differently next time.

Sodexho is discussing implementing a pay card arrangement, similar to what McDonald’s did in the wake of last year’s hurricanes. Companies can electronically transfer employees’ salaries to pay cards, which are similar to debit cards and can be used in stores or at ATMs.

Also, Sodexho is revamping its disaster recovery plan to make sure that employees have all emergency contact information before a disaster strikes. The company has established a permanent 800 number for employees to call in the event of a disaster.

The company hopes this will ensure that it knows where all of its employees are within weeks of a disaster. As it stands now, the company is still missing 68 employees. “These people are either not living anymore or they just haven’t gotten around to contacting us,” says Gerard, the company’s senior director of human resources.

Sodexho has brought back a former human resources manager, Deloris Co, to focus on finding missing employees. Since she started in early October, the company has located 282 employees.

Entergy learned that it was key to be flexible with its procedures and policies. It decided that such flexibility would be fine as long as any steps taken reflected the company’s values and culture. For example, in the wake of the hurricanes the company enacted an interim housing policy, agreeing to pay for housing and utilities for employees who were redeployed. While this was not consistent with Entergy’s past practices, the company knew it was the right thing to do for its employees, Raeder says.

As the company decides the fate of its headquarters over the next few months, Raeder says she is secure in knowing that the company’s employees feel that Entergy did everything it could to help them through this time.

Now, Entergy has started running weekend buses to New Orleans so that redeployed employees can return to their homes and assess any work being done on their homes and neighborhoods. The buses run from Houston, Jackson, Little Rock and Belmont, Louisiana. But like its workers, the company isn’t sure it can ever go home.

“We know that it’s taxing for employees to not know where their jobs are going to be,” Raeder says. “But we need to wait for the city to be able to support a Fortune 500 company.”

Workforce Management, February 27, 2006, pp. 42-45Subscribe Now!

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