A New Alternative to Employee Lay-offs Can Help Staff Start-up/Small Businesses

In today’s economy it appears that every day more and more companies are laying off countless numbers of workers.  However, what you don’t hear about are the companies that are in dire need of superior talent, but typically can’t afford to hire a full-time person with the skills and experience they’re seeking.  From this dichotomy is born a new staffing business model currently being piloted in the United Kingdom.

This program is being launched by a not-for-profit organization called WorkWise UK, and the program, essentially an online swap shop, is called StaffShare.  The basic concept:  companies without current need for the employees they have – but yet not wanting to lose them permanently, offer them up for short and medium-term loan to companies needing the talent but not able to afford the full-time staff position.  Both firms provide their information on the website, the WorkWise system makes a potential match and the two parties work out the details of the exchange.  StaffShare takes a 7.5% commission for making the match.

The program was originally developed to benefit charitable organizations when it was conceptualized two and a half years ago.  However, after it’s launch 6 months ago  in the midst of the worst economic downturn in decades was so well received, the scope of the program was expanded.  Learn more about the details of the program HERE.

We at Strategic Growth Concepts believe this inventive business model has tremendous potential for success in the U.S. and will be watching the UK pilot to see how things progress.  We urge U.S. businesses to begin considering a similar program here, where major corporations that are now forced to consider layoffs can instead loan those employees to smaller or start-up businesses that can’t afford the high-skill, high-priced talent on a full-time basis, but can likely afford to take advantage of it for several weeks or months. 

What kind of impact do you think such a program could have on the development of new businesses/small businesses in the U.S.?  And since small businesses are typically responsible for the largest percentage of jobs and job growth in the U.S. economy, what type of impact could such a program have on the economic recovery if applied on a wide scale?  We think the results could have a substantial impact on economic recovery for the following reasons:

  • rather than experiencing layoffs, employees at companies considering down-sizing can instead be placed into temporary positions where they can maintain a regular income until once again needed at their permanent position
  • since employee layoffs would be decreased, less people will need to utilize state-sponsored unemployment programs and planned government health programs as well
  • less people needing to utilize unemployment programs insures that the Federal government will not have need to subsidize state programs and extend benefits; thereby making more money available for other economic growth-oriented programs (or to pay down the historic debt our country is now facing)
  • the employees placed in temporary positions will keep their skills fine-tuned, and will likely pick up additional skills and experience which will make them even more marketable going forward
  • companies that were considering layoffs can instead take advantage of the short-term cost-savings of having the employees temporarily removed from their payroll, but yet have the ability to bring them back when their company’s economic crisis has passed
  • small businesses will be able to achieve success faster due to the fact that they are able to take advantage of premier talent and expertise to help them achieve growth
  • more successful small businesses will create more jobs
  • more jobs will lead to faster economic recovery

I’m certain that economic naysayers will be able to poke holes in our assumptions about the potential benefits of such a program, but in my opinion, even if only one or two of those assumptions were to actually come to fruition, I believe the results would be positive.  What do you think?

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The author, Linda Daichendt, is Founder, CEO and Managing Consultant at Strategic Growth Concepts, a consulting and training firm specializing in start-up, small and mid-sized businesses. She is a recognized small business expert with 20+ years experience in providing Marketing, Operations, HR, and Strategic planning services to start-up, small and mid-sized businesses. Linda can be contacted at linda@strategicgrowthconcepts.com and the company website can be viewed at www.strategicgrowthconcepts.com.

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4 Ideas to Reengineer Your Human Resource Practices

From time to time Strategic Growth Concepts utilizes this blog to present articles for our readers from HR consulting firms which are a complement to our own expertise.  The following is an example of this with an excellent article from Kelly Jackson, Founder and President of the KJ Group.  We encourage you to review Kelly’s advice, and put it to use to help your organization.

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4 Ideas to Reengineer Your Human Resource Practices

Got budget?

You’re not alone. Corporate belts are cinching all across America. While a few unfortunate companies are struggling for survival itself (including the once-invincible General Motors Corporation), nearly all organizations are looking for ways to become leaner. The solution however, isn’t as simple as cutting HR budgets by 15%. The challenges the HR professional faces today are more complex: maintaining productivity while reducing staff, for one. A company can be facing contraction and experiencing growing pains, at the same time. Staffers at OHM, Inc. (OHM), a regional engineering and architectural firm are working twice as hard, just to maintain last year’s revenue. At the same time, the company is growing geographically and adding new services to its offering. These conflicting challenges forced OHM’s leadership to look beyond simple budget and staff reductions to reengineer its human resource practices. And OHM is not alone. Across the HR field, companies are finding creative ways to “do more with less”.  Following are four simple ideas you can use to help you reengineer HR:

  • Analyze Your HR Practices
  • Develop a Strategic HR Plan
  • Embrace Technology
  • Leverage Your Resources

Analyze Your HR Practices

Everyone gets stuck in a rut. You are so busy putting out fires that you have little time to think about the big picture or the smaller details. Reach out for another pair of eyes to give you a fresh perspective. One valuable tool to help you gain insight is an HR audit. Find an HR expert to review and evaluate your company’s HR operations, top to bottom. An audit is an extensive examination of a company’s systems and practices.

What’s on the list for an HR audit? These areas are likely suspects:

  • Recordkeeping
  • Compliance
  • Salary and Compensation
  • Benefits
  • Professional Development and Training
  • Performance and Recognition
  • Recruiting and Retention
  • Safety and Health
  • Culture

With a successful audit, you’ll uncover those compliance risks that can derail an organization, learn how your company’s practices compare to industry leaders and get a host of new ideas to improve your results.

Don’t overlook local, state and federal program resources either. Recently OHM used free safety consulting services, offered by the State of Michigan, to develop a comprehensive internal and external safety plan. The results? The company minimized risk and saved cold cash through reduced rates for workmen’s compensation insurance.

Develop a Strategic HR Plan

You want senior leadership to understand that HR brings value beyond the basic hiring and firing functions. A strategic HR plan aligns the department’s goals with those of the organization. Is your company’s executive team planning to enter new markets? Sell off a low performing division? Any major corporate actions are sure to have an impact on HR. When a regional service firm created a 5-year strategic plan to expand its single-state presence to the entire Midwest through a series of acquisitions, the firm’s HR executive created a plan to support those goals. She focused on learning the employment laws in the new states, securing regional benefit brokers and creating step-by-step processes to integrate the acquired staff members.

Embrace Technology

Technology can streamline HR workflow, provide communication and accessibility to a non-centralized workforce and allow your staff greater flexibility. Some great technological time-savers: web-based payroll and HR Management System applications, employee intranets and electronic applicant tracking systems. The HR manager at an 160-person, five office company, partnered with the IT department to create a simple intranet-based tool for employees to make annual benefit selections. Going electronic with this process saved the organization more than 50 man-hours annually by eliminating the production, collection and tabulation of paper benefit enrollment forms from multiple offices. The electronic entry system also reduced errors by 92%, resulting in additional time saved.

Leverage Your Resources

This concept is about accomplishing HR objectives, especially those strategic goals, more efficiently. Break free of traditional practices. Rather than hiring a new staff member to fill a long-term but ultimately temporary need, consider alternate forms of employment, such as payrolling. Payrolling is the practice of referring a contingent worker to a staffing vendor or payrolling provider. The vendor acts as the employer of record, responsible for employer taxes, payroll, and all legal matters pertaining to employing workers, thereby reducing contingent workforce costs.

Your company’s employees can be an invaluable resource, too. When Paul Levy, President and CEO of Beth Israel Deaconess Medical Center in Boston challenged the hospital’s staff to volunteer creative cost-saving ideas, he received hundreds of suggestions. Putting some of those ideas into practice, BIDMC was able to save enough expenses to reduce necessary layoffs from 600 to 150.

In another cost-savings example, Workforce Management (June 2009, Speizer) highlights the case of Florida Power & Light (FPL), which put its benefit plan out to bid, rather than just renewing with existing providers. FPL forced vision, dental and other benefit providers to openly compete using an auction-style process. Cost savings are estimated to be $1.1 million annually. 

Don’t overlook the importance of employee morale during an uncertain economy. Enterprising HR departments can give employees valuable benefits, without blowing the budget. OHM offers its staffers bimonthly brown bag lunch-time enrichment events, led by local vendors, experts and service providers. These vendors deliver their programs at no or nominal charge to the company. Topics can be work-related subjects such as time management and presentation skills, or take a personal bent, such as choosing a workout program or creating a will.

Times are tough, all across America. Just as the bankruptcy of Chrysler and GM is forcing the Big Three to reinvent themselves, Human Resource leaders can use these four concepts to reengineer their service offering. Leaner, stronger, smarter and faster – no matter what business you’re in, those are goals we all share. 

Kelly Jackson, a Human Resources professional with nearly 20 years experience, is the founder and president of KJGroup, a human capital management firm that delivers People Peace of Mindsm. Kelly is a certified Senior Professional in Human Resources (SPHR®), and a Business Coach. For more information log on to www.kjgrouphrconsulting.com