Is Forced Time Off the Right Cost-Savings Solution for Your Company?

As more and more employers are looking for ways to save money in today’s economic crisis, many are reaching a decision to implement an “unpaid time-off” program. There are pros and cons to this decision – from both the employer and employee perspective. If your company is considering such a program, the article below will be worth your time and consideration. The questions asked will help you evaluate if ‘forced time off’ is a viable solution for your firm, or not worth the potential risks.

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Is Forced Time Off Fair?

March 16, 2009 , Tom Davenport, Harvard Business Publishing

One of the common approaches to dealing with this recession is for companies to ask — well, tell — employees to take time off without pay, a day every week or two. This 10 or 20% haircut is supposed to indicate that “we’re all in this together,” and that it’s better for everyone to suffer a little than to lay some people off.

While I have some sympathies with this philosophy, I’m not sure it’s either fair or wise. On the issue of fairness, if such a policy had been instituted in 1969, it might have been very fair. But in 2009 there is much less of a relationship between hours on the clock and work actually done, at least for knowledge workers. How many of you reading this post actually work only 40 hours a week? How many of you only work on official workdays? Today, most people have a continuous mixture of work and non-work activities, and it will be difficult for any knowledge worker to stop working for a day every week or fortnight. I might suggest that this is exactly what the employer wants, but that would be a cynical remark.

There is also the issue of whether the forced haircut is wise. I have problems with its wisdom in two respects. One involves the fundamental principle that all employees are equally valuable. It’s nice to pretend that they are, but we all know they’re not. Giving all employees a haircut may lead the most valuable ones to look elsewhere. There was a column in a recent Boston Globe about treating all employees (at Boston’s Beth Israel hospital) alike with regard to cuts. It’s heartwarming, but if it leads to an across-the-board haircut, might some of the best employees leave for wealthier hospitals across town?

The other potential problem is that employees, given an involuntary time chop, may look elsewhere to fill the void. They’ll freelance, e-lance, or moonlight to replace the lost income. This could lead to a variety of negative scenarios for the employer/barber who originally chopped their time. The employee might find the freelance employer more desirable, and jump ship altogether for full-time employment there. Or he might end up doing a bit of his freelance work while ostensibly on the clock for the 80% or 90% employer. I’m not saying that 10 or 20% haircuts for everyone are necessarily a bad idea. I do think, however, that they are hardly a no-brainer either. The inclination to share the pain is admirable, but it could open the door to a host of problems.

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Even in Today’s Economy, Finding Qualified Job Candidates Can be Difficult; Here are 10 Tips to Increase Your Odds

Employee graphicYou would think with today’s economy that  all you would have to do to attract employees would be to stick a sign in the window of your business that said “Hiring” or place an advertisement in the local newspaper and then pick a new employee out of the hundreds that applied. However, as needs become increasingly more technical and specialized, jobs for businesses small and large are going unfilled – even with today’s surplus of available labor.

However, this situation doesn’t mean you should give up on hiring new staff.  In many ways, small businesses have an advantage in hiring because all things being equal, there are many qualified candidates who would prefer to work for a small business. The following tips for attracting employees will help you increase your company’s chances of finding the specialized staff that you need.

1. Find out what the going rate is for the available position and insure that your company is at least matching it.

One common mistake many small business owners make when creating a position is to base the salary on their budget rather than market realities.  This strategy serves to insure that their employee recruitment efforts will be unsuccessful.  Why should the most qualified prospects work for your company at a lower wage when they can earn more with your competitor?

2. Offer a comprehensive employee benefit program; and remember, not all benefits cost money.

In situations where a prospective employee has the qualifications that allow them to pick and choose, an excellent employee benefit program can move your company into the preferred position. For successful employee recruitment, your company needs to offer employees life, medical and dental coverage at a minimum. If your small business does not have an employee benefits program, it’s time to speak with your insurance company about setting one up. You can often achieve cost efficiencies in the purchase of those benefits by joining business organizations such as the Chamber of Commerce where you can take advantage of their larger group rates for members.  Additionally, don’t forget about the small things that can be of big importance to employees because they add to their quality-of-life; items such as:  flex-time, birthday’s off, personal days, paid time off to perform community service work, bringing pets to work, etc. can provide a nice incentive that set you apart from other companies competing for these highly-qualified employees.

3. Make lifestyle part of your employee recruitment offer.

Since many employees today are just as concerned about quality-of-life as they are about the amount of money a position offers, the area your business is located in can be an added benefit toward luring prime employee talent. If you’re fortunate enough to be located in an area with great skiing, beaches, extensive hiking/biking trails, excellent golf courses, limited traffic issues, great weather or other attractive features, be certain to emphasize those benefits during conversations with prospective employees.

4. Emphasize the benefits your small business offers that many companies do not.

Make your company more attractive to potential employees by offering things such as work-at-home or flex-time options, Adoption Assistance, Education Assistance, On-site Daycare, In-chair Massages, or other benefits that provide the potential employee an added incentive to join your company.

5. Find creative ways to offer perks similar to those of ‘the big guys’.

As a small business, you may not be able to offer the perks large corporate companies are able to offer their employees due to cost – but you may be able to offer a reasonable facsimile. For instance, many large companies offer on-site health facilities such as a fully equipped gym. Chances are good that as a small business, you’re not going to be able to add one of these to your premises, but you might be able to offer employees coupons to use local gym or spa facilities, or a company-paid gym membership.

6. Offer employees opportunities for advancement.

Most employees aren’t looking for jobs where they’ll do the same thing for the next thirty years. Typically they are seeking a position that offers opportunity for advancement, as well as a way to insure they achieve that advancement.  For example, will your company offer the chance to develop new skills?  Do you have an actual career-path designated for new employees which insures their ability to advance?  Do you offer a mentor program in which they can learn the best ways to succeed within the company?  All of these programs provide added incentive for a prospective employee to choose your company.

7. Create an employee incentive program to drive performance.

Employee incentive programs not only reward good employee performance, they also give prospective employees something to look forward to if they select your company. Whether it’s an annual company-paid retreat, a program where employees collect points that they can trade in for cash, or awards that are highly-recognized and coveted within the company and/or your industry, employee incentive programs can increase your chances of attracting the most qualified employees.

8. Institute a profit-sharing program.

There’s possibly no better way to incentivize an employee’s performance and loyalty than to give them a stake in the company’s success. A business that appears to be on an upward trend – and provides profit sharing – can be a powerful inducement to motivate quality recruits to join your firm.

9. Sweeten the pot – up-front!

When competition for the best employees is fierce, a plain old signing bonus may be what’s needed to move the needle in your direction. If you elect to add such a program, there are two things to keep in mind:  1) The signing bonus has to be large enough to matter, and 2) the signing bonus must be contingent upon remaining with the company for “x” amount of time or it will require repayment. (Otherwise you’ll have a revolving door as people sign up, take the money and run.)

10. Broaden the scope of your advertising.

It’s not enough anymore to place an ad in the ‘Help Wanted’ section of the local newspaper. In today’s hiring environment, it’s imperative that you place advertising in online job boards, in trade association publications/online media, and that you post them in a wide variety of social media such as LinkedIN and Twitter.

It also helps to get your current staff involved in the employee recruitment process as they already have knowledge of the company culture and can typically identify those who will ‘fit’ and those who won’t. Signing bonuses can be made available to those who successfully refer a new employee.

There are many qualified people who can do the work you need done, no matter how specialized;  you just need to develop the right incentives for them to select your company over others they may be evaluating.  Make sure you utilize every conversation with an employee as an opportunity to ‘sell’ the advantages of working for your firm to insure that you can build the best-qualified, most highly-motivated team possible.

Younger Workers Getting the Axe; Older Workers Getting Jobs

 by John Zappe, Jul 28, 2009

CareerBuilder says unemployed older workers are having a tough time finding jobs. A survey released last week says only 28 percent of workers over 54 laid off in the past 12 months found new jobs compared to workers 25-34 who are quicker at finding work. In that age group, 71 percent found a job within 12 months.

As a result, says CareerBuilder, 63 percent of the 55 and up group have applied for lower-level jobs, including entry-level positions and even internships.

That’s probably not much of a surprise to recruiters; 37 percent of them told CareerBuilder they have received applications for entry-level jobs from retirees and workers over 50.

What may well come as a surprise is the rise in older workers and the impact the recession is having on their ranks.

Layoffs and job losses have hit the younger workers hardest. According to data from the Bureau of Labor Statistics in the 18 months since January 1, 2008, the number of workers in the 25-54 age group has declined by 5.1 million. For workers over 54 though, there are 624,000 more working. In fact, there were gains in the number of older employed workers in every age group the BLS tracks except one — 55-59 year olds who saw a modest decline of 79,000 in the 18 months.

Before you point out that the sheer number of older Americans has been rising, which is certainly true, consider for a moment the participation rate. Based on a monthly survey conducted by the U.S. Census for the BLS, the participation rate is independent of population size. It describes the percent of various population groups in the labor force.

The data shows that for the last 10 years, more and more older Americans are working. Since 1999, the percent of working Americans 55-64 has grown by 10 percent, while the over 64 age group has jumped — and that’s an apt word — by almost 40 percent. Contrast those changes to the 25-34 year olds who have declined from 84.6 in 1999 to 82.9 percent for the six months ending in June.

In the 61 years for which the BLS has data, this many older Americans have never been employed. In the mid-50s the percentage began to rise until 1967 when, at the peak, an average of 62.3 percent Americans aged 55-64 worked. The percentage began to decline until it bottomed in 1986 at 54 percent of the age group working. There it remained, rising modestly until the recession of the 90s when it started its upward climb.

 Even more dramatic has been the number of those 65 and over reentering the workforce. For years, between 11 and 12 percent of retirement age Americans have worked. In 1998, on average, 11.9 percent of the 65 and over group worked. In June, it was 16.8 percent.

The explanation for the uptick in older Americans working is not too difficult to guess at: Longer life spans, better health, and access to health insurance whether private or through Medicare, the decline of the defined benefit pension coupled with the increase in the Social Security age, and, in the last two years, the recession, which has devastated many workers 401(k)s.

The implications, however, are harder to forsee, as is deciding if this is a structural change in the American labor force or a temporary economic blip. A BLS economist told me a colleague of his is researching these very questions.

Regardless of the cause of the return to work by older Americans, there’s no denying the graying of the workforce. For the first six months of this year workers 55 and over accounted for 21.8 percent of the labor force. That’s the highest percentage since 1971.

Meanwhile, the percentage of 25-34 year olds has taken a nose dive. From a high of 36.6 percent in 1986, the percentage has dropped 11.5 points to 25.1 percent for 2009. For the 25-54 year age group as a whole, there’s been a decline of almost eight points since 1993, when 86 percent of the workforce fell into that age group. For the first six months of 2009, 78.2 percent do.

Consider now the demographic factors we’ve detailed: an aging workforce, reentry into the workforce by workers who in years past would be retired, lower workforce participation by workers in the entry-level age group of 25-34, and, finally, the sheer reduction in employment by that age group caused by layoffs and other factors.

The implications of this are immense for employers and recruiters.

Among them is the increase they are seeing in mature workers seeking jobs. That 37 percent of recruiters who told CareerBuilder they’ve received applications from mature and retired workers for entry level jobs is, therefore, not that much of a surprise after all.

Even though the CareerBuilder survey says 65 percent of the employers report being willing to consider overqualified candidates, the reality is probably closer to the 44 percent of mature workers who say they’ve been told they are overqualified. Recruiters who reject overqualified mature workers may find it increasingly difficult to find the young workers who might otherwise take those jobs.

Should recovery from the recession prove to be as long as some economists are now fearing, retirements will continue to get pushed off and retirees with diminishing payouts from their 401(k)s and other savings will reenter the workforce at an accelerating pace.

Evidence of the former is in the CareerBuilder survey. One in five employers report being asked by employees to postpone retirement. Most of those employers (86 percent) said they would consider it.

If the demographics are any guide, 100 percent may come to wish they did.

Motivate Employees with ‘Flexible Fridays’

As with many small business owners, I belong to a number of online social networks including Twitter and Facebook.  I frequently review postings from other members to identify interesting information that I believe will be of value to my target customer, small business owners. 

In reviewing some recent Twitter postings, I came across one from Amy Nichols the CEO of the franchise organization, Dogtopia.  Her posting regarding the ‘Flexible Fridays’ program at her company struck me as a concept that other business owners might have interest in using in these days of high gas prices, long commutes and 60-hour work weeks. Therefore, I asked Amy if she would write an article to share her program with our readers.  The resulting article is below.  I hope you enjoy it as much as I did. (By the way, as a former D.C. area resident myself, I can absolutely attest to the traffic difficulties Amy discusses in her article; I assure you, I would have been thrilled to have an employer who believed in ‘Flexible Friday’s’ when I lived there!)

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Flexible Fridays

Washington, D.C. is known as our nation’s capital, but it also has another national moniker, that of one of the worst cities for traffic in the country.  Forbes ranked us in the Top 3 Worst Traffic Cities with the likes of Los Angeles and San Francisco. http://bit.ly/ForbesWorstCitiesForTraffic

Commuting in our area is grueling, and after leaving the “rat race” seven years ago to start my own business, I thought I had found a way to truly control the time I spend in my car.  I opened a doggie daycare, Dogtopia, just seven miles from my house.  Our business hours had me commuting outside of the most congested periods of the day, and I felt that I had solved the problem.  No longer would I be subjected to hours of wasted time in my car.  Until I decided to expand the business, that is.

A few years later we decided it was time to grow Dogtopia.  We had great success with the first dog daycare franchise in Tysons Corner, VA and felt it was time to add a “sister store” in North Bethesda, MD.  The new Maryland store would be only 14 miles from the Tysons Corner location – an easy commute between the two.  Or so we thought.  Apparently, the Wilson Bridge that takes you over the Potomac River and from Virginia into Maryland, had other ideas.

Skip forward a few more years and we are now a growing franchise company with 20 locations across the country.  We also have over 30 employees, six of which are in franchise management and report daily to our North Bethesda location.  The North Bethesda location now houses our national headquarters and training center.  Since we began the business in Virginia, that also happens to be where the majority of our corporate staff  lives, thus the daily undertaking of the Wilson Bridge.  The result, I was back to where I started eight years before and dealing daily with the horrors of DC traffic!

It occurred to me last summer that it would be quite easy to work from home on Fridays, and I felt that I deserved a day free from commuting.  My second thought was that my employees would really enjoy working from home on Fridays.  And if I could do it, why couldn’t everyone on our management team?  They would each save two hours or more in daily commuting time, and could therefore have an earlier start to their weekend and more time with their family.  I even came up with a clever name, “Flexible Fridays.” 

The way the program works, you can work wherever you want, but there are a few rules:

  1. Must be available by phone
  2. Must be online and available in email
  3. Must be on Instant Messenger

 The first two are quite obvious; the third requirement is because even when in the office, I often use IM to communicate with my team.  I might have a quick question while on the phone with a vendor or franchisee and it prevents me from having to yell and/or put the person on hold. 

Our initial ‘Flexible Fridays’ program last Summer worked great!  Knowing they had at least one day per week where they could avoid traffic really improved the outlook of the staff, and I know they appreciated my gesture.  There have been a few frustrations, but the slight inconveniences are more than outweighed by the increased satisfaction felt by my staff.

 This year I decided to once again offer ‘Flexible Fridays’ and so far, so good.  Other times of the year it would not be possible due to franchisee training and other commitments, but it has become a nice Summertime perk, and one that I plan to continue indefinitely.

Managing Virtual Employees

 

By Nipa Shah, June 18, 2009

Nancy is a financial analyst working for a mid-sized company located in the United Kingdom, but she lives in Michigan. She works from home in her pajamas and “meets” her boss once a month via video conference.

She is a virtual employee enjoying one of the perks of working from home and leveraging technology to stay in touch with her boss.

Companies across the globe are leveraging technology to retain resources that no longer have to be located in the same building or even in the same country. It is commonplace to hear of an individual working for a multinational company and having never met another team member.

By creating a virtual workforce, companies have been able to create efficiency, reduce travel and overhead costs, and essentially service the end-customer 24/7. Virtual employees, on the other hand, benefit from having a better work-life balance due to flexibility in working hours and not having to dodge rush hour traffic to be at work at a specific time.

Companies, however, face a common concern when it comes to virtual teams, that of measuring an employee’s productivity. Since the employee is no longer under a manager’s nose per se, managing productivity through “oversight” is impossible. Another concern is keeping an employee motivated and connected to company happenings.

The virtual team requires a shift in managerial and employee behavior. Here are some best practices which can effectively help you manage virtual employees:

Level Set Expectations
Beyond the policy and procedures set up by human resources, be sure to level set your expectations with your virtual employee, in a one-on-one discussion. Specifically state how you’d like him or her to keep in touch, how often, by what means (e-mail, chat, phone), and what deliverables you expect to receive at various times during the week. By level setting expectations in a more personalized manner, you create a better working relationship with your virtual employee and also plan for corrective action in the future.

Trust Employees
This is an important responsibility for a manager even when managing an on-site employee. It is an even more important responsibility when working with a virtual employee. Lack of trust can lead to micromanagement, which is never productive. Refrain from micromanagement in the form of “urgent e-mails” and “urgent voicemail” on a daily basis, which can create friction and unproductive working relationships between manager and employee. Trust the employee to do the work assigned and to turn it around in a reasonable timeframe. Once expectations are set, trust the employee to perform and do the work as assigned.

Provide Tools and Support
Virtual employees may require additional support to ensure their productivity. They could run into technical issues when connecting with a company local area network, or they could have issues sending large files through the firewall. All these issues need to be promptly addressed so that productivity is not impacted. Tools such as a BlackBerry, fax, access to resources and webinars, etc. should be offered to ensure employee can do the job.

Create an Inclusive Environment
Just because an employee is virtual it doesn’t mean he or she should be isolated from corporate events and happenings. Virtual employees still need to be included in team meetings, conference calls, town hall meetings, and other events so that they feel as if they are part of the corporate culture. 

Communicate, Communicate, Communicate
The importance of communication cannot be overstated. Even with all the technology in the world, it is important to do more than “staying in touch.” On a regular basis and without micromanaging; keep in touch, ask questions, participate in dialog, provide feedback, ask for feedback, etc.  Do everything necessary to stay in touch with your virtual employee so that you have clear communication.

A virtual workforce can be a blessing for companies and individuals alike. To make it work effectively, everyone involved will need to learn new skills and techniques. A successful virtual workforce can help a company save money and increase efficiency. Implement the above strategies and create a dynamic virtual workforce for your company!

Nipa Shah is president of Jenesys Group, LLC, an online marketing and Internet solutions company, providing technology consulting (with emphasis on offshore management) and online marketing. She is also the founder of the Michigan India Chamber of Commerce. Shah can be reached at nipa@jenesysgroup.com.

Benefits vs. Budgets: Providing Employees with Real Assistance During Tough Economic Times

By Darla Mullner; June 18, 2009

It’s no secret that every business today, regardless of sector, is faced with tough financial decisions. To that end, how do companies retain employees when budgets are impacting salaries and benefits? On one hand, management might take the position that with uncertainty in the marketplace, employees, despite reduced compensation packages, will stay in a job no matter what. That’s the short side of the argument.

The larger picture is that the economy is sure to rebound and employees have long memories. One approach is to provide meaningful benefits coupled with real assistance for all employees in an effort to aid retention and provide for an enhanced quality of life.

When faced with a competitive marketplace, the demand for highly skilled workers in a particular industry such as health care is fierce. The most cost-effective and efficient strategy is to hire the best employees during the recruitment phase and retain them for as long as possible by offering benefits that will enhance their quality of life. These quality of life benefits encompass several areas and include financial assistance, health and well-being and work-life resources.

Financial Assistance
In addition to wages, perhaps your organization may allow employees to “assist” co-workers that are facing a difficult financial situation. If your organization is a nonprofit and has a foundation or charitable affiliation, consider whether or not a special employee-fund can be established. Annual or any time contributions can be made and “drives” such as a cookie, flower or the like can generate thousands of dollars. Another way that employees can assist a co-worker in need is through the donation of Paid Time Off (PTO) hours. This is especially useful when an employee is experiencing a serious medical condition and has exhausted their own PTO hours or if they need income for time off.

Large organizations should take advantage of the purchasing power of a big group through discounted services and coupons offered by national retailers and service industries.  For example, employees might receive a 15 percent discount when using an on-campus or nearby daycare provider. Employees might be eligible to receive 20 percent off tax preparation services by a nationally known tax preparation service. Other reduced costs can be negotiated for employee entertainment such as amusement park fees and movie theatres.

Health and Well-Being
Most employers are well aware of continually rising health care costs. Disease prevention and fitness opportunities not only benefit the employee, but healthy team members use less health care services and costs can be better managed. Consider partnering with a local fitness center and offer free or discounted memberships, not only a great benefit, but also a great way to contribute to the bottom line.
 
Employees are people with lives outside the workplace. To ensure productivity and peak performance, offering a free employee assistance program (EAP) when someone needs guidance, counseling, referrals to local services or reliable professional care is often money well spent by the organization. Services include emotional health counseling and referrals, financial consultation including budgeting, credit assistance and college or retirement planning. The EAP also provides legal services including consumer and family law situations, traffic citations and estate planning.

Work-Life Assistance
Going beyond a paycheck can help make a difference in an employee’s life. What can your organization provide to enhance the lives of workers? For instance, consider offering all employees interest-free loans for the purchase of a personal computer. The incentive is that many employees in a large manufacturing firm or service organization may not have access to a personal computer on daily basis. As more communications and employee activities become electronic it becomes even more critical to offer ways to “wire” staff members to the organization. Partnerships with banks or credit unions are also desirable for employees who can take advantage of the option of checking and savings accounts as well as automatic payroll deduction for home and auto loans.

Helping employees hone skills that might be outside their normal job duties is also a great idea. Consider partnering with a local community or business college to offer staff free office software classes such as word processing, spreadsheet and presentation software.

The lifeblood of any business is its workforce. Today’s leaders must recognize that without talented, highly skilled and dedicated workers, many organizations would merely be buildings with equipment and furniture. Therefore, the best investment we can make for the future is the investment of a compensation package that provides employees with useful and meaningful benefits that enhance their quality of life.

Darla Mullner is human resources director at Rush-Copley Medical Center in Aurora, IL, a 183-bed hospital providing health and wellness services to the greater Fox Valley community.  Rush-Copley was named one of Chicago’s 101 Best and Brightest Companies to Work For in 2008. Mullner can be reached at dmullner@rsh.net.

Top 10 HR Mistakes Made by Businesses – Large & Small

  1. Failure to develop an effective corporate communication strategy; internal and external.
    • Establish specific communication policies
      • internal/external email
      • internet/intranet
      • social media
      • IM
      • media/public communication
      • corporate document sharing
    • Publicize internal communication; open access promotes honesty and trust between management and staff
      • staff meetings
      • town halls
      • newsletters
    • Handle confidential information appropriately
  2. Failure to link individual goals to company goals
    • Short-term and long-term objectives; personal and company
    • Developing action plans
      • corporate > division > department > individual
    • HR planning
      • staff selection & planning
      • training & development
  3. Not utilizing HR metrics to track activity and performance
    • Measure how activity is impacting the bottom line, not just the cost of the activity
    • Needs to objectively demonstrate benefits to the business
  4. Lack of employee motivation and retention strategies
    • What motivates employees?
      • recognition; feeling valued by the organization
      • sense of achievement
      • feeling they are an integral part of the organization
      • opportunity for increased responsibility and advancement
      • compensation package
    • Develop credible reward programs
    • Insure that compensation packages are competitive to the market
  5. Lack of strategic recruitment plan
    • Hire people that fit; effort, expectations, attitude, talent, skills, training, experience
    • HR needs to manage the recruitment process, not department heads or executives
  6. Lack of training
    • Empower front-line management with authority; train them to use it effectively for the organization’s benefit
    • Don’t allow lack of awareness to be an excuse for inappropriate actions
    • Insure managers have training regarding legal issues affecting the manager/employee relationship
    • Ensure there is a clear understanding of corporate values
  7. Not establishing employee performance guidelines
    • Establish a reward system based on performance
    • Insure timely attention to employee performance issues to prevent staff morale issues
  8. Failure to keep up-to-date on legal requirements related to HR
    • Establish a network of experts for guidance
    • Participate in continuing education programs
  9. Lack of documentation
    • Insure proper tracking, measuring, analysis, reporting and follow-up
    • Meet all legal requirements for payroll documentation
  10. Failure to maximize the effectiveness of the HR team
    • HR should be an integral part of the executive team
    • Be pro-active rather than re-active to avoid negative perception amongst staff
    • Allow the HR department to be the catalyst for change management initiatives

Let us help you avoid these mistakes; contact us via our website or email us at info@strategicgrowthconcepts.com for assistance with your HR strategies and structure.