Oiling the Company Machine in Difficult Times

3 Feb

Several weeks ago a friend of mine attended a ‘state of the union’ company-wide meeting for her organization.  It was a dual-purpose rolling out of the numbers from 2009 and the new game plan for 2010, which included across-the-board salary cuts for all company employees.

Now I’ve been a “numbers person” for years, with a front-row seat to the P&L’s and budgets at my last company, so I know well that operational expenses and operational income go hand-in-hand.  However, it doesn’t ease the pain of those employees under the  umbrella, from the soon-to-be college grad intern to the senior VP who started the company several years back.  Knowledge doesn’t refill the bank accounts, or pad the paychecks, it doesn’t pay the bills, and sometimes it fails to simply ease the mind.  While the optimist may say “Well, at least I still have my job,” most people are thinking “I’m expected to do the same job at 20% less of my salary.”  So what’s an organization to do when it comes to the well-being and retention of their good employees?

A few weeks later an email from the CEO arrived detailing a couple of new policies.  “Great,” my friend thought.  “Just what we need- more policies to force us to work harder under diminished quality of living”.  At least this is the mistake many companies make in times of cutbacks – if the company is doing poorly, we simply have to work harder and more diligently to make up the gaps.  But this CEO knew better.  Though a seasoned professional, he was new to the organization, and had been essentially called in to fix the lingering financial and organizational problems that had been plaguing the organization for years.  He knew that enforcing stricter policies when morale was already low wouldn’t do any good – it wouldn’t motivate anyone and it would decrease productivity.  Instead, he worked on ways to “give back” to the employees what he could outside of a financial realm, to increase morale and show that upper management really was in fact taking the employees’ needs and suggestions into consideration.  He announced a new dress code policy, no longer requiring business casual, and allowing for casual dress 5 days a week (with exceptions of course for meetings and sales).  He also announced that employees would have the option of working flex hours to better fit their schedules and increase the work-life balance.  While it didn’t sooth the financial wounds employees felt, it was something, and more importantly sent the message that employees were still valued.

In a time where so many companies are failing and almost everyone is feeling a deep financial pinch, isn’t it important for companies to consider retention of good employees, given that it costs three times as much to hire and train a new employee than to retain an existing person?  At the very least, it’s an exercise in reality and rationale – you can’t run a machine without the parts that work in tandem to make it function.   So keep them clean, polished and do your best to reduce unnecessary wear and tear… and results will be positive.

Photo Credit: Leon Bibel (1936)

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