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Workforce Stimulus Plan

As our new President is inaugurated today, we’re all keen to see the audacity of hope converted into the realization of productive change that can restore our economy and put our growing numbers of unemployed Americans back to work. One of the most burning issues for many Americans is what the new administration will do to stimulate the economy through government spending. Our board member, Jared Bernstein, has recently joined Vice President Joe Biden’s staff as an economic policy advisor. You can read some of his thoughts about what an economic stimulus package needs to achieve in his testimony before the House Committee on Education and Labor on October 24th of last year.

While most of us don’t have much say as to where those government dollars will land, we do have choices to make about how to keep our organizations healthy and our employees engaged.  Many organizations worldwide are cutting budgets, including headcount, in an effort to remain viable.  Following are suggestions from our board members and other Workforce Institute stakeholders about how organizations can keep their employees engaged and stimulate workforce productivity, even as they are forced to make tough workforce budget decisions.

Leadership is More Critical Than Ever:

  • Get extremely focused on setting and aligning employees around key business goals.   It is critical that everyone in the organization be spending time on those things that matter most for the company’s survival.  Set realistic goals.
  • Employees will be looking to their managers to share the pain of wage freezes, reductions of perks, and increased workloads driven by headcount reductions.
  • Paying attention to employee engagement as a key business driver is as important now as it is when employees may have more opportunities elsewhere in the market. Our newest board member, CEO Andy Brantley of the College and University Professional Association for Human Resources, writes about how cutbacks are impacting the academic workforce in his blog.

Involve Employees in Business Improvement Efforts

  • The employees closest to the work can have great impact on improving revenue and margin opportunities.  Mel Kleiman cites the example of one of his dining clients holding meetings with frontline workers to enlist their ideas to increase profit margins. This client has seen a reduction in food cost of almost 2%. In another case, following an employee resignation, a manager offered a 50 cent/hour raise to the remaining employees if they could come up with a plan to get the job done without a backfill.
  • Being assigned to a strategic project is often viewed as a reward/recognition for above-average performance and when these projects dry up, it can negatively impact top performers.  Creating strategic initiatives focused on operating improvements provides learning and recognition opportunities for top performers while driving needed organizational efficiencies.
  • Conduct company-wide contests for ideas on how to improve operational efficiency.  If you want to get really creative, turn such an initiative into an American Idol-type format, hopefully without the lunatics.  Winners can receive monetary rewards equal to a percentage of the savings/benefits generated.

Communicate, Communicate, Communicate

  • Complete transparency is difficult when individuals’ jobs are on the line, however keeping the lines of communication open about what’s happening in the market and what the organization is doing to respond is critical to keeping employees engaged and productive. In the absence of information, employees will assume the worst case scenario.
  • Russell Klosk notes that the debate about whether you let employees know when they are identified as high potential has resurfaced. The majority view on this is to let top performers know they are considered high potential so that they’ll be more invested in remaining with the organization.

Get Creative with Rewards

  • One company in the office cleaning business gives a cleaning crew member the vacuum cleaner they have been using to take home at the end of the year. They say the results have been amazing: less theft, better care of the equipment, reduced turnover and more motivated employees.
  • Tim Lett suggests team-building efforts focused on helping out in the local community. “We participated in a toy drive in Toronto just before Christmas and it’s amazing how good people feel when they contribute to things like that.  The cost is nil, you get to help a worthy cause and you get people together to work as a team and feel good about themselves.  Executive management participation is critical.”
  • Deb McGrath suggests increasing the contribution to stock option plans (so that employees can benefit from the recovery). She also suggests giving employees loans for cars and mortgages. There was an interesting article in Sunday’s New York Times on the latter.
  • Reward outstanding performance through public recognition – at meetings, in newsletters, in the CEO blog
  • Make available to managers small “gifts of gratitude” to be handed out on the spot to reward and reinforce great efforts – for example: movie tickets, free meal ticket, $5 or $10 iTunes gift card.
  • Throw an ice cream or pizza party on all three shifts and have the Executive Team serve to show their personal appreciation

Talent Management is Still Important

  • Help employees use the recession as a chance to take on new challenges and build their skills and experience.    It’s a challenge we have to get through, so we might as well use it as a chance to learn.
  • Many of the contributors to this post indicated that leading companies are using the current slowdown as a time to invest in employee training – both internally and through encouraging employees to seek outside development. This is an immediate skill building benefit for employees, that can also enable the organization to redeploy or advance employees as opportunities arise.
  • Tim Lett cites an airline client with a program where employees can take foreign language classes on their lunch breaks.  Employees seem excited about the opportunity to expand their skills and the company benefits by having a larger pool of employees with language skills to handle international customers or work in international locations.
  • Invest in internship programs to build your talent pipeline while providing college students with important resume building opportunities. If the opportunity to learn is good, students will consider unpaid internships.

Creative Labor Cost Management Strategies

  • While many organizations are downsizing to trim operating expenses, Russell Klosk cites a recent article in the New York Times by Matt Richtel about the extraordinary length some companies are going to in order to avoid layoffs and hold onto their workforce. Specifically “Cisco implemented a four day shutdown (no pay for anyone). Motorola asked staff to take salary cuts across the board”. Other employers are shifting to 4-day work weeks and trimming benefits. The interesting quote was “Companies taking nips and tucks to their workforce say this economy plunged so quickly in October that they do not want to prune too much should it just as suddenly roar back.”
  • Workforce management technologies such as scheduling and analytics can help ensure that employee resources are optimized for the job at hand.  Already stressed managers will benefit from better control over expenses such as overtime and absenteeism while automated scheduling solutions ensure that shifts are covered.  Even better is to implement employee self service options so that shift bidding is handled fairly while accommodating employee preferences.

What would you add to the list above?

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  1. I would add two points to this excellent list of suggestions. One is that communication should be highly proactive. In difficult economic times, it is more important than ever to push the information out and make sure that everyone in the organization hears the messages. Keeping open lines of communication is good, but don’t wait for questions and concerns; anticipate what employees want to know and get that information to them. The other point is that simply listening to employee concerns is very powerful. Managers should offer opportunities for individuals and small groups to express their worries and concerns even if there is nothing that can be said at the moment to allay their fears.

    January 21, 2009
  2. Getting creative with rewards is important — but it’s even more important to do it in a fiscally responsible way. Now more than ever, company leaders need to know where every dollar, euro or pound is spent. Giving managers gift cards to distribute at will makes it impossible to track these for proper taxation from payroll — a nightmare for HR and accounting. Gift cards are a terrific solution, if done through a program that makes “grossing up” for taxation a simple, intuitive process in compliance with taxation laws — everywhere in the world.

    Charity contributions are another brilliant employee reward suggestion — as long as the employee being recognized gets a say. Again, this is easily solved through a program that lets employees make the choice to donate their well deserved recognition to charity.

    Ice cream/pizza parties at work do not deliver the return many employees expect. Often, employees would rather share their rewards with friends and family outside work — people they may not see as often as they like due to their diligent efforts on the job that earned them the recognition.

    I blog extensively on these topics here:

    January 21, 2009
  3. I would add to the list of leadership pointers that leadership must stay deeply engaged whenever technology dollars are spent. Assigning an implementation to a project team and hoping for positive ROI is not enough. Technology teams must be held accountable just like engineering teams with routine design reviews where C Level Goals for the technology are mapped down to the end users tasks built into the system. Someone must be able to answer HOW the system & users will drive expected results. Just as this article suggests, what frontline employees do is crucial.
    Secondly, companies can find immediate savings by re-evaluating their compensation configuration. There is ample opportunity to reduce payroll leakage seeping out of accurate but ineffective rules. There could have been a disconnect between the people who understand the intent of your compensation practices, wage & hour laws, and the people who set up the system. There is often more than one way to set up a rule to pay accurately, but only one “best way” to minimize the financial burden on the payor (employer). These economic times call for a close assessment of payroll overspend.

    January 21, 2009
  4. Kevin Su #

    I would add one point as “New Corporate Culture “. Because in the tough situation, we need streamline all employee to the right attitude and direction we expected. In the enconomic crisis, company need to change or adjust the corporate culture to meet the new situation and competetion. Before all things on operation level, we need establish a right attitude for empoyee and workforce to make sure the collabrative and efficient business they could run.

    February 24, 2009

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