Monday, February 16, 2009

Getting Creative to Save Jobs

I went to a SHRM-Atlanta chapter meeting last week and attended a great workshop on compensation during these economic times. The speaker, Phil Blount, from Phil Blount and Associates had some really good ideas on how to save on salary/benefit expenses before having to lay someone off. He suggested the following:

1) Furloughs-shortening the work week to save on salary expense. Interesting caveat to this one, BE CAREFUL WITH YOUR EXEMPT STATUS EMPLOYEES AND WORKING PARTIAL WEEKS.

2) Merit increase delays-instead of saying no merit increases, delay the increase to a future date even if the amount is only 1%.

3) EXECUTE on Pay for Performance-now is the time to reward your top performers and save on salary by not rewarding poor performance.

4) Suspend 401(k) contributions-A few people in the room had to do this. The key was explaining the reason and relating the money saved in contributions actually saved X number of jobs.

5) Conduct a benefits audit-see where you can adjust company portion on premiums, deductibles, coverage amounts, etc. to save on employer paid benefits.

6) Temporary pay cuts-Make sure you look at each department separately to see where this is needed most. Many companies are executing across the board pay cuts, this strategy may be easy but it may impact those you need to retain the most when the economy picks up.

In a Wall Street Journal Article, "Cut Pay, Not People," David Lewin, A UCLA professor states, "In a recession, it's smarter to reduce employee pay than to make layoffs."
7) Travel and expense freeze-many companies are limiting or reducing company travel.

8) Voluntary retirements, layoff-Ask employees if any would like a package. Some employees may be in a position to quit work.

I would love to hear what you are doing in regards to total compensation during these crazy times. Please post a comment wiith your ideas!
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