The Economy is Bad so Why Are Employees Clamoring for More Money?

For many companies business is down and costs are up.

As a manager you may be spending hours crunching the numbers to figure out where you can cut expenses and how much you can raise your prices without losing your customers. The last thing you are prepared for is employees to start demanding pay increases. Surely your employees realize times are tough and they should be grateful just to have a job, right? Careful, you may be in for a big surprise if you do not build salary increases into your planning scenarios.

There are some obvious reasons why your employees may be asking for more money. The same rising costs you contend with in your business are also hitting workers' pocketbooks. Rising fuel prices impact all aspects of workers' budgets, from daily commutes to increased food prices. You certainly didn't tell your employee to go buy that big SUV but now that gas prices have surpassed $4.00 a gallon you still need them to get to work and in order to do that they must fill the gas tank, particularly in areas without adequate public transportation or other viable alternatives.

The housing crisis may be just a statistic on the nightly news to some but in many American households it is a very personal financial emergency. The complexities of the current housing crisis will be analyzed and argued about for years to come. The issue from your employees' perspective is that wages have not kept pace with either home ownership costs or the rental market. According to June 2008 information published by the California Department of Housing and Community Development a worker earning minimum wage would need to work 120 hours per week to afford an average two bedroom unit at $1249 per month. The 2008 California Family Self-Sufficiency Standard estimates a single person in Santa Barbara County must earn a minimum of $13.86 per hour and in San Luis Obispo County a minimum of $11.52 per hour just to cover the most basic costs of living. In Los Angeles County the minimum is $12.51 per hour and in San Francisco it is $12.17 per hour.

Health care costs are also rising at an alarming rate both for employers faced with ever increasing costs to insure employees and employees who often must pick up a larger share and pay more out-of-pocket to maintain coverage. In a June 17, 2008 article the New York Times quoted Federal Reserve Chairman Ben Bernanke speaking before a Senate panel, “Improving the performance of our health care system is without a doubt one of the most important challenges our nation faces”.

There are also some less obvious but equally important reasons employers may find themselves facing more pressure to give wage increases to employees. Overall the demand for skilled workers remains strong. There are certainly downturns in some industries, most visibly construction and housing, however overall the unemployment rate remains relatively low in many regions. While the May unemployment data for California shows an average rate of 6.5% many areas still have very low unemployment rates. The unemployment rate for San Luis Obispo County in May was 5.2% and Santa Barbara County was 4.6%, both below the National rate of 5.5%. In San Francisco it was 4.9% with Los Angeles County coming in closest to the statewide average at 6.4%.

The labor pool is also changing rapidly. Baby boomers are set to retire in record numbers which will leave many industries scrambling to replace skilled workers. Estimates of the number of retirees and the associated brain drain from the economy vary widely. Most experts agree it will have a significant impact on the economy worldwide and for many industries a significant shortage of skilled workers is predicted. According to an April 2008 Sacramento Bee Article written by Daniel Weintraub,

"At times like this it can be tempting to conclude that California's economy is falling apart, that all the good jobs are gone and our young people will be forced to fight over a few low-paying positions in the service sector. But as bleak as things look today, and they may well get worse in the months ahead, the long term is likely to be very different. Within a few years, in fact, the big story in California might be a shortage of skilled workers, not a shortage of jobs for them to fill." Employers must maintain a long term perspective if they are to retain their most skilled employees who will be in ever increasing demand as the economy begins to recover. The Economic Research Institute notes that employers are expected to give increases for 2009 of around 4% but that rate may vary significantly depending on the industry and the demand for labor and skills within their industry.

Adding to labor market pressures, fewer workers are willing to relocate to new areas, particularly if they own a home they would need to sell in this uncertain real estate market. If you are in an industry that requires a skilled workforce you may face added wage pressures from headhunters calling on your employees with tempting offers. The Federal Reserve Beige Book for June 2008 acknowledged that wage pressures were limited in many sectors, "However, wage increases remained rapid for skilled workers in selected sectors, such as computer services." DICE Holdings specializes in technology and financial service sector recruiting and CEO Scot Melland had this to say about the results of a recent DICE survey, "The weakness in the employment market is not impacting compensation. In many categories this is still a tight labor market and companies realize they have to pay competitive wages and take into account the cost of living."

The experience of an economic downturn may be a new one for many workers who have never fully experienced a recession. Even average income working Americans have grown accustomed to a lifestyle that includes a lot of luxuries, both big and small. When everything from a fast food dinner to postponing the purchase of a new car begins to feel like deprivation employees will look to close the economic gap with higher salaries.

What does all of this mean for employers? First, be conscious of wage pressures so you understand what is happening in your industry. Don't just assume your employees will be willing to stay put without raises, especially if they have high demand skills. Make sure any financial planning you do takes realistic wage increases in account. If raises are not an option it may be time go get creative. Companies experiencing financial strain may need to try other ways to help employees face rising costs and maintain employee morale. Perhaps employees can work a 4 day schedule to reduce commuting expenses or telecommute. (see article by Reed Jorgenson on the legal issues involved with alternative workweek schedules)

There is no set formula for addressing wage issues but a little research and planning are the best way to be prepared to address the issue with employees.

Secret Ballots and Government Notification?: What Employers Need to Know About Alternative Schedules in California

Gas prices continue to soar, and hourly employees are feeling the pain as more and more of their paychecks go right into their gas tanks. People are turning down positions 15 miles away from their homes, citing gas costs as the reason, and employers, also faced with rising costs of doing business in a down economy, aren't able to match candidate demands. Facing constant pressure to keep wages competitive and costs low, what is an employer to do?

Many companies are coming up with creative solutions to this problem, and are increasing employee loyalty and retention at the same time. Some companies have instituted free public transportation passes, or are even going so far as to coordinate carpools for employees. It used to be that providing paid parking was a benefit for most employees, but now the real benefit is the company that can help them get to work. Even for local employers on the central coast, where public transportation is very limited, companies might consider contracting with a vanpool service to provide additional commute alternatives to their employees.

Alternative schedules are another way of dealing with this issue, and one that employers are increasingly exploring. Alternative schedules include a 4/10 workweek (four, ten-hour days) or what is known as the 9/80 schedule, which allows employees to work a 9-hour day, and take every other Friday off. Employees reap the benefit of these alternative schedules in the form of reduced commute costs and more days off, and employers often see increased employee retention and satisfaction using these schedules.

However, instituting an alternative schedule requires more than just a decision. In fact, California wage & hour regulations require a very detailed, multi-step process involving secret-ballot elections and notification to the State of any alternative workweek. The detailed language of the requirements for alternative schedules can be found in the Wage Orders promulgated by the Industrial Welfare Commission. (As a reminder, too, every employer is required to post the applicable wage order for your business, so you should also be able to locate this information on the bulletin board with the rest of your required postings.)

A few of the basics that employers should be aware of is that an alternative schedule can be put in place for the whole company, or just a department or work unit. So for instance, you may find that an alternative schedule will really benefit your hourly manufacturing staff, but won't make much difference for your highly-compensated administrative staff. Because of the formality of the election process, make sure you survey your employees first and find out what will work for them, and what will work for your business needs. This saves the cost of conducting an election, and then having to re-do it because you've instituted a schedule that doesn't provide the staff coverage you need.

Prior to the actual election, an employer is required to provide a written disclosure to all the affected employees, "including the effects of the proposed arrangement on the employees' wages, hours, and benefits. Such a disclosure shall include meeting(s), duly noticed, held at least 14 days prior to voting, for the specific purpose of discussing the effects of the alternative workweek schedule." What follows is then a regulation-mandated election process, and then notification to the Division of Labor Statistics and Research of the new schedule.

Any employer considering implementation of an alternative schedule should walk through the process required by the Wage Orders, and should make sure that their HR department is involved in the entire process, to ensure compliance with the wage order and seamless integration with payroll and benefits.

Desperate times call for desperate measures, and even with the administrative burdens imposed by the State, many employers will see the benefit of instituting alternative workweeks. To make sure they're legal, though, companies must make sure to comply with the IWC regulations, or risk severe penalties.

National Weather Service Issues "Excessive Heat Watch"; State Officials Issue Heat Illness Prevention Alert

The National Weather Service has issued Special Weather Statements in regards to heat and an Excessive Heat Watch onTuesday, May 13, 2008. Such is the statewide concern over the potential hazards to employee health and well-being posed by this heat wave, state officials from the Divivision of Occupational Safety & Health, Department of Industrial Relations, and the Labor & Workforce Development Agency organized a conference call and issued alerts to employers and other stakeholders.

Although all employers have a duty to provide a safe and healthful working environment for employees, Cal/OSHA regulations now require any employers with outdoor worksites to provide training and have a written program on Heat Illness Prevention. Because of statewide high and possible record-high temperatures expected in the short term, and probably all summer, various California state officials have issued an alert to employers to remind them of the duties to provide Heat Illness training. The regulations, originally issued in 2006, require all employers with outdoor worksites to:

1. Provide heat illness prevention training to all employees, including supervisors.

2. Provide enough fresh water so that each employee can drink at least 1 quart per
hour and encourage them to do so.

3. Provide access to shade for at least 5 minutes of rest when an employee believes he or she needs a preventative recovery period. They should not wait until they feel sick to do so.

4. Develop and implement written procedures for complying with the heat illness prevention standard

The Division of Occupational Safety and Health has also provided the following information to help employers comply with the regulations:

TRAINING
Before employees can work outdoors, employers are required to provide them with heat illness prevention training. This mandatory training for supervisors and employees under the new standard includes the following information:
-Environmental and personal risk factors
-Employer's heat illness prevention plan and procedures
-They need to drink water frequently throughout the day.
-Importance of acclimatization (allowing the body to adjust gradually to the work in high heat)
-Types of heat illness and the signs and symptoms
-Necessity of immediately reporting to an employer any signs or symptoms
-Employer's procedures for responding to symptoms
-Employer's procedures for contacting emergency medical services. This includes alternative modes of transportation
-Employer's procedures for emergency communications. This includes the emergency response procedures such as location, local medical services, and communication alternatives.

Adjusting to the heat
One training component for employees on heat illness prevention is the importance of acclimatization, or adjusting to physical activity in hot weather. The body needs time to adapt to increased heat and humidity, especially when one is engaged in heavy physical exertion. Typically, people need four to fourteen days to adjust fully to significant increases in the heat. Cal/OSHA data reveals that most workplace deaths related to heat illness that occurred last year involved new employees who were on the job only one to four days and were unaccustomed to working in hot or humid weather.

While the heat illness prevention standard calls for employers to train employees on the importance of acclimatization, it is up to employers to determine what acclimatization procedures they will use. The best strategy is to allow employees, and especially new ones, to adjust to hot weather by gradually increasing to a full work shift and pace. On very hot days, other good strategies include timing the shift so that more work can be done during the cooler parts of the day, increasing the number of water and rest breaks, and using a "buddy system" so that workers and supervisors can monitor each other. Also, employees should be reminded of the cooling benefits of wearing loose fitting, light-colored clothing and a wide-brimmed hat, when it's feasible.

SHADE

Recent safety and health data shows that all the surviving victims of heat illness had access to some shade during work periods, lunch, or at breaks. Under Cal/OSHA's new standard, an employee working outdoors who wants to cool off must be provided with shade for 5 minutes at a time. Shade for heat illness recovery periods must be accessible to employees at all times. In industries other than agriculture, employers may utilize measures other than shade to provide cooling if they can demonstrate that these alternative measures are at least as effective as shade.

According to the new standard, shade means blockage of direct sunlight. Shade is sufficient when objects do not cast a shadow in the shaded area and there is sufficient space for the employee to be comfortable. Shade is not adequate when the temperature in the shaded area prevents cooling. You must avoid sources of shade such as metal sheds or parked cars that are hot from sitting in the sun. Also, tractors and other machinery do not qualify as sources of shade and have the potential to create an even greater hazard. If you have employees who work outdoors, consider some easy-to-assemble portable sources of shade, such as umbrellas, canopies, or other temporary structures. Buildings, canopies, and trees all can qualify for shade as long as they block the sunlight and are either ventilated or open to air movement.

WATER

The third component of the new standard requires an employer to provide employees, working outdoors, one quart of potable, fresh and cool water per person, per hour. In last year's case studies, Cal/OSHA data revealed drinking water was present at all worksites, even though 78% of those who succumbed to the heat suffered from dehydration. Therefore, it is critical to keep drinking water accessible and remind your workers to drink it frequently.

WRITTEN PROCEDURES

The new standard requires an employer's heat illness prevention procedures to be in writing and made available to employees and to representatives of Cal/OSHA upon request. These written procedures must include:
-How an employer will comply with the heat illness standard requirements.
-How to respond to symptoms of possible heat illness, including how emergency medical services will be provided.
-How to contact emergency medical services, and if necessary, how employees will be transported to a point where they can be reached by an emergency medical service provider.
-How they will ensure that, in the event of an emergency, clear and precise directions to the work site can and will be provided as needed to emergency responders.
-Employers are encouraged to integrate their heat illness prevention procedures into their Injury and Illness Prevention Programs (IIPPs). All the elements of the Heat Illness Prevention standard must be implemented to prevent serious illness to your workers. By protecting your employees from heat illness, you promote a healthier and more productive workplace.

To learn more about the shade, water, written procedures and training requirements of the Heat Illness Prevention Standard, visit http://www.dir.ca.gov/.

Boss or Team Coach?

Say the word coach and virtually everyone will form a mental picture. It may conjure up an image of little league, your days as a high school athlete, the debate team or even the trainer you hired to help you get into shape. Most of us have been coached at some point in our lives with varying degrees of success.

In recent years, many of the concepts coaches use to develop winning teams are being translated from the playing field to the workplace. Coaching techniques are being employed as another tool employers can use to build a winning workforce and maintain a competitive edge in a tightening global labor market.

When working with an athlete to achieve peak performance coaches know they must find the right balance between challenging and nurturing individuals, often as they simultaneously attempt to create a winning team from disparate talents and personalities. The most successful coaches somehow manage to make that delicate balance look effortless. The workplace provides a similar set of challenges. For some managers coaching is an instinctive personal style that they fine tune through practice and experience. For many managers the concept of coaching will require a shift in how they view the management role and perhaps an adaptation of their instinctive personal style.

How do the skills coaches employ translate into the workplace? Coaches begin by first assessing the talents and skills of an individual and how those skills and talents fit into the big picture whether it is a team or an individual sport. Great coaches never stop there, they continue to evaluate, assess and review that initial picture as the individual matures and the needs of the team change. And a great coach recognizes and acknowledges the value of each member of the team whether they are the star quarterback or in a supporting role.

But can coaching skills work in the business world? Yes, but first you may need to shift your perspective. In a coaching focused work environment the old top down command and control view of management is passe.

The manager in a coaching work environment is not required or expected to play the role of the all knowing wizard, controlling every aspect of when, where and how the work gets accomplished. Freed from the need to control and fix everything that happens in the business, managers can focus on creating a more collaborative work environment. Well coached employees begin to assume greater responsibility for how their work contributes to the overall goals of the organization and are encouraged and expected to think and work more independently. When the approach is effectively applied the end result will be a more engaged, happier and productive workforce.

Sounds good but how to make it happen?

First, that shift in perspective. Start looking at your employees in a new way. Not as people who need constant management and control but as members of a team who are ready, willing and able to do a good job. Look in the mirror and ask yourself if your need to be in control has more to do with your own insecurities than employee lack of skill or willingness to do a good job. Remember, coaches know that once the players are on the field it is their skill and determination that determine the outcome and your job is to stand on the sidelines as head of the support team.

Look at each individual, not just what you want to accomplish. Every employee has strengths and weaknesses. It is the coach's job to figure out how to capitalize on the strengths to the benefit of the organization and what training or development needs to happen to improve weaknesses. Coaches learn to look for natural talents and capitalize on them. Sometimes players get shifted around the field. At first glance your may see a poor performing employee but you may just have a terrific employee in the wrong position. A natural sales talent stuck behind a computer alone all day is not a winning strategy for the employee or the business.
Coaches know when and how to cut someone from the team. If the positions you have available just are not a good match for the individual and keeping them on the playing field is just too costly then let them go. Just because someone isn't a star gymnast doesn't mean they might not be a star tennis player. Give them the opportunity to move forward and shine in a different place. Be sure you do everything possible to maintain their dignity in the process.

People make mistakes. Good coaches recognize a failure can be the best possible teaching experience. People given the opportunity to make mistakes without fear of being berated or belittled are more likely to push themselves to grow and take on new challenges. Coaching means helping employees figure out how to fix things that go wrong so they can prevent making the same error again.

Give them the ball and make them run with it. Coaches know they cannot fix everything and cannot provide all the solutions. Watching someone struggle to master throwing the perfect pass takes lots of patience but if you grab the ball away each time a player falters then they will never develop the skill or confidence do themselves. If you create a work environment where you never let employees run with the ball then you will find yourself overwhelmed by the demands on your time by the very people you hired to relieve your workload. If there is constantly a line-up of employees outside your office door who are afraid to act without your direct input then it is time to look at the direct or indirect messages you are sending to your team. Stop making all the decisions and rushing to provide solutions to every problem for them. If you hired good people chances are you are surrounded by good ideas just waiting to be heard.

Which leads to yet another under appreciated coaching skill, listening. Coaches who listen to their players on small issues are less likely to find themselves with major issues that interfere with the goals of the team. Coaches know they need to listen to good and bad news and that shooting the messenger will guarantee no one wants to tell them the truth. Always remember your team is on the playing field where the action is. Your skilled and experienced players are looking at the game from the playing field perspective and just may have ideas and solutions you never thought of.

Make your feedback constructive. Coaches don't just scream at their players that they are doing everything wrong and then walk off the field. At least not if their intent is to win the game. Be specific, offer suggestions and guidance and then give your players the opportunity to practice. What if the tennis coach said to a player that they swing the racket all wrong and then walked away? Nothing would be accomplished because without any feedback about what needs to change to improve the player's swing and no opportunity to practice new techniques nothing changes. The result? Two frustrated people and no progress toward achieving the mutually desired result, winning.

If you have never considered a coaching leadership approach in place of your current management style you may want to give it some thought. Making a commitment to coaching can shift the tone of the organization. Think back to any experiences in your life when you were coached and then contrast that to times when you were being managed or bossed. Which was most successful? If you have the opportunity to observe a good coach in action consider how those same techniques may improve your organization. Of course, growing up as the daughter of a coach it made me a believer that good coaching skills build more effective teams, sports or business. Thanks Dad!

Complying with the American Disabilities Act When Hiring - Part I

Job Applications
The American Disabilities Act (ADA) prohibits various types of questions of job applicants. Any inquiries on job applications or in interviews regarding an applicant's health or disabilities are illegal under the ADA, as well as other laws.

Prior to recruiting, the employer needs to determine the Essential Job Functions (EJF). When determining the EJFs you must ask yourself if each of the facets of the position are fundamental or integral to the job, MUST be done on a regular basis or on a rare occasion, or can this function be moved to another position without having a critical impact on this job, and the degree of expertise or skill needed to perform the function.

Skills Testing
Pre-employment tests that measure such things as sensory, manual, or speaking skills are permitted under the ADA if the skill being tested is necessary to perform the EJF's, meaning that the test is job-related, and if the tests have been validated to ensure that they measure what they purport to measure. If you are using un-validated skills tests, you are opening yourself to liability for discrimination.

The results of such tests may not be used to screen-out individuals with disabilities. Pre-employment tests should be administered with reasonable accommodations for those applicants who request accommodation.

Interviewing Don'ts
The ADA prohibits pre-employment inquiries about disabilities, whether overt, hidden, or assumed

There are certain questions that are regarded as disability-related, and therefore illegal to ask in a job interview or solicit in background and reference checks:

• About physical impairments like scars, burns, or missing limbs.
  
• If he or she has a disability, for how long, the nature or severity of it, or how it occurred.
  
• About mental or physical impairments unless the applicant has disclosed it and the discussion is limited to determining if the person can perform the EJF's, with or without reasonable accommodation.
  
• If ever been injured on the job.
  
• How many days sick last year.
  
• Been addicted, in counseling or treated for drugs or alcohol abuse.
  
• Been treated for any other disease, medical condition, or disability, or on any medications.
  
• Been in counseling or received psychiatric care, history of filing workers' compensation claims.
  
• Whether there is any health-related reason the applicant may not be able to perform the job.
  

DO NOT assume that an applicant cannot do the job because of an apparent disability.
The applicant may be able to perform the essential functions of the job with or without reasonable accommodation. See next month's Challenge or contact Bonnie Royster, SmartSource Hiring System Manager at Your People Professionals 805.928.5725 for Part II Interviewing Do’s to Comply with the ADA.

SMALL COMPANY HAS BIG IDEAS ON GIVING

"We're not a big company but we want to make a big contribution to our community" says Naomi Neilson Howard, CEO of Native Trails, Inc. at the kickoff meeting of the company's new Community Trails program that pays employees who contribute time to qualified San Luis Obispo county charitable programs. Employees can take paid time off to volunteer up to 16 hours a year, in lieu of doing their usual job.

"Native Trails has always been about making a positive contribution to the lives of our employees," says Howard, who started her business on her kitchen table while attending Cal Poly and feels fortunate to be able to live and work on the Central Coast. "Now we want to make it easy for each of our employees to make a contribution to their community."

The workers responded very positively to the chance to get involved. "I've met many people that have needed help. I always had it in my mind that if one day I could do something, I would. Well now it's my chance to do so," commented one employee, after learning about the volunteer program.

While the charities in San Luis Obispo County get much-needed volunteers, Native Trails expects the program to help build teamwork and a sense of community among its 32 workers.

The program was introduced this week at an employee luncheon that featured speakers from five of the area's leading community organizations including the American Red Cross, Food Bank Coalition, Woods Humane Society, American Cancer Society, and Hospice of SLO County.

Lydia Hunt, of the local American Red Cross chapter hopes it will encourage other companies to get involved. "I think it's very important for people to volunteer. It helps them to better understand their community and the services that are available, if they ever need them. Most of the employers in this area are smaller companies, like Native Trails. I hope this inspires them to do something like this."

Naomi Neilson Howard hopes so too. She's volunteered to share her experience with other local companies about how to implement a similar program.

In addition to supporting volunteers, the company also helps raise money for local charity groups by matching up to $500 a year in employee charitable giving through a payroll deduction program. In addition, each employee who contributes 30 hours or more a year can earn an additional $200 donation from the company for their favorite charity.

Native Trails is a privately-owned company based in San Luis Obispo. The company produces artisan crafted copper bath and kitchen fixtures using environmentally responsible materials such as recycled copper and reclaimed wood. Its products are sold throughout the U.S. and in Canada. For more about Native Trails, Inc. visit www.nativetrails.net

Recession - Keeping Your Business & Your Employees Moving Forward

When you can't get through the evening news without hearing another commentator asking another expert if we are in a recession you can assume we are heading into, in the midst of, or on the way out of the dreaded abyss.

So what does it all mean for your business and your employees? Whether it is ultimately called a recession or something else, there are too many associated variables for anyone, expert or otherwise, to predict with certainty what will happen to you, your company and your employees. Take a deep breath, make a realistic assessment of your specific situation, develop a plan and keep moving. Fear and inertia are your worst enemies in challenging times. You don't control the nations' economy so leave the hand wringing to your competitors and focus on making the choices and changes necessary to ensure your company doesn't become a statistic.

This is the time to get an overall picture of your business and your industry. Know the current cash position of your business, sales trends in recent months as compared to prior years and the status of your economic universe, whether it is local, national or international. Getting a current picture is not the same thing as getting caught up in the paralysis of analysis. If you see red flags try to pinpoint the cause. Just because the buzz on the street is recession doesn't mean you should make excuses for a weak sales team or ignore an outdated marketing strategy.

Try to avoid the coffee shop blues. You know, where you sit around with your colleagues and complain about how bad things are out there. True or not, that time can be better spent on activities that support your business. Make a sales call, finish a proposal or visit a client.

Look for the opportunities because even in the worst of times there are success stories. The foreclosure market has spawned new marketing opportunities for those who took immediate action when they recognized the boom market was taking a turn in the other direction. A recent news story showed one entrepreneurial real estate agent who takes real estate investors on tours of foreclosures in a tour bus.

Negotiate everything. If you are in the market to buy a product or service this may be the best time to make your available resources go a little farther.

Evaluate your pricing strategy and your target market. Recessions don't last forever but if you make poor cost cutting or pricing decisions under pressure you may find yourself facing unintended consequences long after the economy picks up again. As things shift in the economy plan to make adjustments but maintain a long-term perspective too.

Keep marketing at the forefront. Business graveyards are littered with companies that took a short sighted view and pulled back on marketing to save money only to become a distant memory in the minds and wallets of their customer base. Rethink your marketing strategy, find ways to make every marketing dollar do more, but never abandon marketing in hopes that you will get back to it when things improve.

Spend your time on what matters most and what makes your business tick. This isn’t the time to start doing the filing yourself to save money if your strength lies in making sales. You will be costing yourself far more than you will save.

Employees are also a critical consideration when the economy is shaky. If business is affected then the economy is hitting individuals hard too. Just when you need your team at peak efficiency you may find yourself addressing issues with distracted or distraught employees. There are a number of proactive things you can do that may minimize the impact and keep things on target.

If your business is under financial stress be sure to keep your employees in the loop. Nothing will start people heading for the door faster than a sense of secrecy and fear. You may think you are hiding it well but employees know when things are off kilter. If the situation is challenging then engage your leadership team and other employees in the process. You might be amazed at the ideas that emerge when employees know you view them as keys to the success of the business. Make sure employees know the leadership team is looking forward and solutions oriented.

Be sensitive to employee financial challenges. Take a look at creative ways to provide support. Maybe you can offer an employee who has a long commute the option of telecommuting for one or more days a week. Be aware that younger employees have probably never experienced a real economic downturn before and may be anxious about the unknown.

If you have decided it is strategically necessary to downsize then take steps to streamline your operation. Fewer employees mean more opportunity for burnout among those who remain. Sometimes organizations cling to antiquated processes out of habit or simple inertia. Fewer people available to carry the load can create the opportunity to introduce more efficient methods. That can mean a leaner and more responsive organization.

Downsizing can also create an opportunity for businesses in need of additional talent. When other companies are forced to layoff talent you may find yourself in a position to reap the benefit.

Prepare your managers to expect employee stress to spill into the workplace. Be sure they understand the difference between being supportive and being overly involved. Offer them training on coaching employees who are facing stress.

If you know one of your team is facing a critical financial situation and you have an Employee Assistance Program be sure to steer the employee there for professional assistance. It can help take the pressure off of both of you to put some of the stress in professional hands.


Keep customer service a core value. When marketing dollars get tight your best source of referrals should be the happy customers you already have. Keep in touch and let them know you appreciate their loyalty.

Stay in touch with the business community. If you belong to business organizations stay active. It may be tempting to pull back when you are dealing with the challenges of a changing business climate but community and business associations can be an excellent source of support and referrals.

Finally, take the difficulties you encounter in an economic downturn as long-term lessons. It can be an opportunity to build your confidence in your ability to lead your company when you have successfully navigated through rough waters. A recession can be a great lesson in adapting to unexpected challenges and doing more than you thought possible with fewer resources than you thought you had to have. Who knows, looking back on it someday you may see it as the secret to your success.