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?

___________________________________________________________

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.

Advertisements

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.

____________________________________________________________

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.

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.

Do You Know What Your Employees are REALLY Thinking?

One of the biggest issues facing the owner of a company – particularly as it grows larger – is keeping a pulse on the thoughts and feelings of the company staff.  As every smart business owner knows, your front-line people are often the most critical to your organization, but they also tend to be the ones a company CEO has the least contact with.

Below please find the story of one CEO who took a bold step to learn the thoughts and opinions of his front-line staff so he could insure that his decisions were being properly implemented – and he could insure that the decisions he was making that would affect those staff members were the proper decisions based upon all necessary facts.

While most business owners would not be able to initiate this type of plan, reading about it may cause you to develop other ideas that can be implemented within your firm to obtain similar results.

__________________________________

The undercover boss

By Stefan Stern – Published: June 8 2009

Employee attitude surveys, brown bag lunches, focus groups, informal chats: managers try quite hard to find out what their staff are thinking. But the results are mixed at best. What are your staff thinking? Admit it – you don’t really know.

Is there any way of finding out? Electronic surveillance would be a bad idea. Cloaks of invisibility work for Harry Potter, but are not available to the rest of us. One chief executive has done the next best thing. He went undercover in his own business for two weeks, disguised as an office worker, completing shifts on 10 different sites. He has heard for himself what his people really think. It has been a revelatory experience.

Stephen Martin is the 43-year-old CEO of the Clugston Group, a medium-sized civil engineering and logistics company based in the north of England. But for two weeks earlier this year, as far as his colleagues were concerned he was “Martin Walker”, an ordinary co-worker trying to earn a living like everybody else.

Ordinary, that is, except for the film crew that was following him around. The cover story was that this documentary team wanted to record how a clerical worker would cope with the demands of a physical labouring job. In truth they were making a programme, called Undercover Boss, which will air on British television (Channel 4) in two weeks’ time and then in a US version (CBS) this year.

How did Mr Martin avoid being found out? He is still a relatively new CEO, having started in December 2006. He grew a beard and turned up to work in protective clothing rather than a suit. His down-to-earth, approachable style does not mark him out immediately as “boss class”.

“This was a once-in-a-lifetime opportunity to hear unfiltered what my employees were really thinking,” Mr Martin told me when he came in to the Financial Times office – clean-shaven and in a suit and tie – last week. “They said things to me that they would never have told their managers.”

What lessons has he learnt? “Our key messages were just not getting through to people,” Mr Martin says. “People working a shift on a large site do not have time to read newsletters or log on to websites. You have to communicate with people on their terms, and it is different for every location. One size does not fit all.”

For example, Mr Martin found that an apparently sensible idea – encouraging his workers to take a tea-break where they were working rather than coming back to a canteen – was taken to mean that the break had been cut.

What is more, having worked these physically demanding shifts, which involved pouring concrete, laying kerbs and clearing drains, the boss now has a better informed view of the job. His conclusion: “We were asking the impossible of some of them.”

This TV-inspired experiment has highlighted a classic management problem. Leaders may know exactly what they want to see happening. They send out messages down the management line. Employees ought to understand. But between the top table and the shop-floor something goes wrong. Leadership teams can be scarily ignorant of how badly their wishes have been distorted, and how much unhappiness there is among those on the receiving end.

And right now there is a bigger, more urgent point. In a recession it is even harder to have an effective, open dialogue with an anxious workforce. Mr Martin shared what he had learnt with his team of managers after filming was over. It provoked a (frequently repeated) response: “They’ve never told us that!” But “Martin Walker” had seemed like someone it was safe to talk to, a regular guy, working night-shifts and staying at a £27-a-night ($43) bed and breakfast hotel called the Cocked Hat. “Even we wouldn’t stay there,” his co-workers had told him.

Mr Martin feels he needs to “over-communicate” to reassure staff who have seen big redundancies in recent months. “If you don’t pass on enough information, even if it is bad news, they will fill the gap with something else, probably worse than the truth.”

That view is supported by Robert Sutton, professor of management science and engineering at Stanford University in California, and author of the cover story in the June issue of the Harvard Business Review: “How to be a good boss in a bad economy”.

Prof Sutton says there are four things in particular that managers need to provide if they want to avoid this false anxiety syndrome: predictability (over-communicate); understanding (keep it “Sesame Street simple”, advises Procter & Gamble’s AG Lafley); control (break down big challenges into manageable ones); and compassion (show that you care).

Having had a chance to eavesdrop on his employees’ hitherto private conversations, Clugston’s Mr Martin has been forced to rethink much of what he thought he knew about management.

Convincing employees that the company has their best interests at heart is hard work. Key messages to staff should never go undercover, even if one boss had to don a disguise to find this out.

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.

3 Critical Steps to Improving Your Small Business HR

By Kris Bovay, Manta Online

If people are your most important resource, then you need to understand the role of human resources in your small business. Many small business owners believe that because they have only a few employees they do not need to focus on human resources issues. The reality is that when you are a small business owner, you need to focus more attention and support to your human resources because, effectively, they can make or break your business.

Even from a mathematical perspective this is true. If a small business has only 4 employees, each of those employees has at least a 20% impact on the business (the small business owner is counted in this impact assessment). If a business has 19 employees, each of those employees has a 5% impact on the business; and so on. Therefore the impact of a bad hiring decision or an under-performing employee is significant to small businesses.

Every business employs resources to get work done; typically the resources are a mix of people and equipment. Equipment resources are typically measured for value (that is, cost and return on investment or payback on investment). Human resources are often not valued similarly but if they were, business owners would pay a lot more attention to making sure they hired the right people, trained them well and measured their performance effectiveness regularly.

Click HERE to read what you can do to make your business’ HR efforts more effective.