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Web exclusive: Carol Cobb |
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Cutting Benefits? Don’t Cut Communication
If the sinking economy is forcing you to prune company perks, there’s someone you should talk with first—your employees.
By Carol Cobb
Bonuses? Parking? What about the holiday party? To stay afloat in this tsunami-sized economic crisis, small and mid-sized businesses are trimming operating costs any way they can; including cutting employee benefits. Unfortunately, there’s no formula that says the incidental perks should go first, or that the big-ticket items should stay. But, there is a way to ensure you make an informed and insightful decision on behalf of your work force: Ask them.
The following four simple steps will guide you to the answers you need and create a more open, understanding and cooperative culture in the process of identifying where your company may need to cut benefits.
1. Explain
Tell your employees you have to make cuts and why. Reassure them that the company is stable, but you must adopt leaner practices, at least for a while. You’ll be surprised at how understanding and supportive people are when you are open and forthcoming with them. Cutting off communication in uncertain times enhances the possibility that things will go awry. Rumors start, morale plunges, customer service deteriorates and profits fall. So, talk. It’s the first step in generating trust.
Up front, tell employees you will consider their ideas before making a decision about what is feasible, and that you will come back to them with an explanation for what you are going to do and why you’re going to do it.
2. Ask
You may not be able to expand your employees’ expense accounts, but you can expand their sense of significance and value to the company. Ask them what benefits are most important to them, and which can go. The anonymity of a survey often works best; however, focus groups can inspire employees to build on each other’s ideas. You may want to implement both.
Either way, start by asking: “What makes this a good place to work?” Get the answers and you’ll gain an understanding of why your company attracts good employees. Next, prioritize the list. Then ask for alternative ideas that can save the company money. Employees may generate creative ideas completely unrelated to company benefits, but which lead to more efficiency or greater quality. Perhaps flextime, compressed workweeks, additional time off or the opportunity to work from home would be welcome substitutes for some benefits.
Given the opportunity, employees can offer many creative solutions to help them feel valued while saving the company money. Who knows, depending on employees’ cost-cutting ideas, you might not have to sacrifice benefits at all.
3. Listen, Then Act
Asking for employees’ opinions and ignoring that input in your final decision is credibility suicide. Having said that, you are not obligated to act on every suggestion, either. The cuts you choose should support your reason for offering benefits in the first place: to engage productive people.
Dig deep enough and you’ll discover employees are engaged because they feel valued, not because of free parking and gym subsidies. Productive employees understand how their work fits into the company’s overall mission. They feel they have a role in the company’s future. Study after study has shown these intangibles ultimately have greater value than monetary benefits.
4. Report Back
As the owner, you should present your final decision about cuts in person and in writing. In doing so, repeat what you heard employees say, announce the decisions you made based on that feedback and outline how you arrived at them. Employees who understand how they directly affect productivity are more inclined to support decisions with positive action. The key is to demonstrate to employees the impact their ideas have on the bottom-line success of the business.
Message consistency is critical. Supervisors should be prepared to relay exactly the same information you do. Differing accounts cause confusion and create the impression that management is being dishonest.
When the economy recovers and your company is in a position to reinstate the sidelined benefits, don’t assume employees will want the same ones back. Again, ask. You could learn they value some of the inexpensive perks more than the costlier ones.
In both bad economic times and good, people feel valued when they are informed and included. Engaging your employees as co-architects of a new benefits policy creates ownership, openness and cooperation. Further, it can diffuse the productivity-draining resentment generated by decisions that appear to have been made in a management vacuum. Plus, the “we’re all in this together” approach may rally your work force, giving them reason to work a little harder or a little longer to help the company get over the financial hump.
And, to think, all you had to do was ask.
Carol Cobb is director of human resources at Axcet HR Solutions, the Midwest’s first and largest professional employer organization. Axcet delivers progressive, cost-effective and expert human resources strategies and solutions that enable small and mid-sized business owners to focus on profitably growing their businesses.
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