Workforce Learning
Navigation Home About Clients Contact Testimonials Workshops

OCTOBER 2009: Workforce Learning News

Workforce Learning
Workforce LearningThe recession may, indeed, be at its end

Economists and media pundits are suggesting that the recession is nearing its end — and I am finally seeing signs in the metro DC area that indeed they may be right. My buddies at search firms and recruiting agencies are getting requests every day to fill more jobs, and prospective clients are looking to me to help them in their management challenges. I’m thrilled to no longer be hearing the words: “yes, we want you — but not now,” but rather, “yes, can you conduct a training session next week?”

It’s a relief to be back in the saddle, but I’m also pondering the lessons learned from this challenge. This is something that I regularly ask my clients to consider, for the exercise of reflecting on the actions that led to a success or failure can contribute to deep learning that will guide you through future peaks and valleys.

So, what lessons have you learned in the last 12 to 18 months of economic misery? How can you use this learning to shape your future? Make a list and ruminate on it, for I am confident that the things you come up with will be enlightening and useful not just today, but in the future.

I’m also in the process of thinking about the road ahead, so read on for some forecasts. You’ll also find my bi-monthly interview with an expert and this month’s profile is John White, president of JD White & Associates, Inc. He is a man I have known for decades and deeply respect for he has more than 25 years experience in Human Resource management and in his answers offers keen insights into the recovery at hand. And finally, you’ll find three of my top picks for this month’s Workforce Learning Book Club.

Wishing you a lift in your business, and a lift in your day.

Dr. Alice Waagen, President & Founder
www.workforcelearning.com

THREE SCENARIOS FOR ECONOMIC RECOVERY

Insight into what’s come and why, so you can be prepared to manage your preferred future

By Dr. Alice Waagen, President & Founder
www.workforcelearning.com Fireworks

The scope and magnitude of the economic downturn of 2008-2009 exceeds anything most of us have experienced, with the exception of a few seniors who lived through the Great Depression. 

This reality became abundantly clear last spring when I participated in a network meeting attended by about 40 business professionals. The speaker began the program by asking who in the audience was in transition (out of work and seeking employment). About a third of the group raised a hand. He then asked how many had family members out of work — and another third raised their hands. How about close friends, neighbors, colleagues? Not a hand in the room was down. 

I asked myself then what would be the impact on the collective consciousness? If we all were experiencing a heightened level of financial anxiety and fear for future employment, how would that affect decisions in the workplace? Even now, we can’t truly know the impact, nor can we determine the long-term financial, psychological, and emotional fall-out of the recent recession.

Given that, here are three scenarios to consider:

SCENARIO 1: Stress levels and their impact on work will continue to plague organizations for years to come — even as employees rebuild their financial portfolios.

Here’s why: In extreme cases, businesses ceased to function, and in others furloughs or pay cuts were required. Even those who are relatively recession proof instituted hiring freezes and budget cuts for fear of future negative conditions. Most people I’ve talked with understand the need for financial caution and even accepted mandatory furloughs if it meant saving jobs. But how these cutbacks were communicated and the quality of leadership exhibited in the tough times will be crucial for survival once we are back in growth mode. Those employees who felt the organizations did not handle these bad times well or who saw indications of faulty leadership or bad decisions will be out the door as soon as recovery stabilizes. 

My crystal ball says: Look out for massive employee movement and job shift of the best talent, as we get further on in the recovery.

SCENARIO 2:  Questionable compensation practices in the business world will have an impact on compensation market data.

Here’s why: Like the residential housing industry, traditional compensation practices rely on comparative market pricing. Anyone who’s tried to buy or sell a house in the last six months knows that home prices are down due to foreclosures and short sales. Likewise, organizations that have hired individuals below their market value, who have combined positions due to hiring freezes or who have instituted mandatory across-the-board salary decreases, have their work cut out for them when it comes to getting their compensation structure back in order.  (Those of us who remember the dot-com crash of the early 2000s will have bad flashbacks of what happens when talent shortages cause companies to pay way over market to fill key positions.) 

My crystal ball says: It may take some time to normalize compensation data and practices, but by late 2010 we will again see labor shortages, especially for key talent, just as we did before the recession. 

SCENARIO 3: As the recovery progresses, business leaders will continue to clean house by holding poor performers accountable by instituting best practice standards for performance and requiring more from the management team.

Here’s why: With all the doom and gloom in the press, this is the real silver lining to the recession clouds. I believe that this window of financial distress has caused many business leaders to question wasteful or inefficient practices. That’s good news, for now organizations will be leaner and meaner, and managers will be not only expected but also required to do their jobs well.

My crystal ball says: If businesses, in general, are managed better we will see a net gain from these last few years of distress and chaos.

BOOKS FOR LEADERS: Alice’s Books of the Month

Make Your Contacts CountMake Your Contacts Count
By Anne Baber and Lynne Waymon

I read Make Your Contacts Count years ago when it first hit the bookstores. I would not be exaggerating to say it dramatically changed the way I approached networking. That’s because before I read Anne Baber and Lynne Waymon’s incredible book, I thought networking meant attending business functions for the sole purpose of distributing and collecting as many business cards as possible. I never knew what to do with the cards once I got back to the office, but I was exceedingly proud of the huge pile I had amassed.

Make Your Contacts Count, however, provided me with a new, highly logical, systematic approach to making my way through the packed crowds of business luncheons and trade functions. Following the authors’ step-by-step process, I started to assess my networking skills and I shifted my mind-set about what it meant to meet all those new contacts — some of whom I hoped would be potential clients. Indeed, their detailed self-assessment (in Chapter 1) gave me an overview of the specific behaviors, attitudes and strategies I had going in.

In subsequent chapters, they guided me through a process to refine my purpose for networking, and helped me learn and understand how to better develop trusting relationships that would grow. I have never forgotten their terrific advice about proper body language, tone of voice, and opening conversations. Their “netiquette” tips also are forever ingrained, for they gave me pointers on seeking relationships rather than contacts.
They also advocate looking for networking role models to emulate. I find it wonderful to know that others now use me for this purpose.

So whether you’re looking to build a network of colleagues to help with career advancement or to grow new business opportunities, Make Your Contacts Count is a valuable desk reference and how-to guide for this most misunderstood, misused, and essential interpersonal skill.

The Sixth LamentationThe Sixth Lamentation
By William Brodrick

If you enjoy historical novels and mystery thrillers, you will love The 6th Lamentation, by William Brodrick. The story has a seemingly innocent opening. Friar Anselm is approached one day by an old man asking for sanctuary at his Lakewood Monastery in England. To his and his Prior’s horror, the man to whom they granted sanctuary ends up being a suspected Nazi war criminal.

Meanwhile, the story turns to a dying woman, Agnes Aubret, who worked with the French Resistance helping Jewish children flee the Nazi persecution by finding sanctuary in a sympathetic monastery. The threads of these two narratives unfold, bringing all characters to converge in their search for what truly happened more than 50 years ago. This is Brodrick’s first novel and a real tour de force in revealing the challenges our perceptions can play on events of the past. Quite simply, this is an amazing work.

Orbiting the Giant HairballOrbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace
By Gordon MacKenzie

Books on corporate creativity mostly leave me cold. Spouting tired clichés about “out of box” thinking don’t do much more than repackage truisms. I was thusly wary when my book club picked Orbiting the Giant Hairball this month.

But thanks to Viking Press, Orbiting is bursting with quirky hand-drawn illustrations, many of them printed in brilliant colors. Text fonts vary for emphasis, and the book itself is a work of art  — one that I found immensely enjoyable to read. The author, Gordon MacKenzie, is a former Hallmark Card executive and his message is an important one: Corporate hairballs are the entangled patterns of behavior and bureaucratic policies and procedures that create Corporate Normalcy and stifle creativity and imagination.

Rather than fight the hairball, MacKenzie proposes that we orbit around it, exploring ways to operate creatively while maintaining the spirit of the corporate mission. He uses each chapter to tell a parable from his career at Hallmark, and elsewhere, which illustrates “responsible creativity.”

Mind you, Orbiting is not a how-to manual about creativity. It is a series of offbeat, inspirational stories that show us how to survive working in hairball-bound organizations by rising above the mundane where ideas flourish. Don’t miss it.
 
John White

INTERVIEW WITH AN EXPERT

Dr. Alice Waagen interviews compensation package expert John White, an HR consultant and owner of JD White & Associates

John D. White, Ph.D. is the president of JD White & Associates, Inc., www.jdwhite.net and has over 25 years experience in human resource management. Before starting his own consulting firm in 1995, John was vice president of human resources for BDM Federal, a government contractor and information technology company. In his consulting practice, John works with organizations to develop competitive and comprehensive Human Resource programs. His focus is to help his clients attract and retain the talented staff they need for future success.

John’s fields of expertise include: designing and implementing cost effective compensation and benefits programs; creating innovative performance appraisal and career development systems; designing strategic human resources plans; and developing effective employee communication and management training programs.

Alice Waagen:  What is the biggest impact the recession has had on compensation practices?

John White: I see many challenges ahead for the business world in managing salary expectations under the reality of tight budgets.  Merit increases in the past few years have hovered around 3% to 4% in the Metro DC area.  This year, merit pay increases have shrunk closer to 2% and in some cases, salary budgets have been frozen and employees have received no salary increases at all.  I believe that even after the economy recovers, salary budgets will continue to be tight.  Since salaries are fixed costs, organizations will need to manage their salary budgets very carefully in order to remain competitive. 

Alice Waagen: Do you see other approaches to compensation becoming more popular?

John White:  Companies are continuing to expand their use of employee recognition programs to augment their salary budgets.  These latter programs are not “fixed costs” like salaries, but instead are based on organizational, team and individual performance.

Organizations are looking for ways to reward employees and create a positive working environment without spending huge amounts of money. Employee recognition programs, especially those that use on-the-spot awards to recognize achievement, can do this. Employers typically provide items such as gift certificates, show tickets, sporting event tickets, dinners at good restaurants to provide recognition for excellent performance. 

Another approach business leaders are examining is the use of more “pay at risk” or bonus pay.  Bonus programs, when they are linked to organizational and individual achievement, can have a positive impact on business results and are an effective way to reward employees. However, these types of programs can be very tricky to develop and administer properly. Managers have to be adept at creating measurable and meaningful objectives so that the company is rewarding the right behavior. When poorly administered, bonus programs can actually be disincentives because they can create the perception of unfair rewards. 

But given the tough economic climate and tight budgets, I do think organizations will have to try to more tightly link their allocation of compensation dollars with their actual business results.
In addition, there are other ways organizations can create a positive working environment that don’t involve compensation at all.  Flexible work schedules, for example, do not increase fixed operating costs but are important to many employees seeking to achieve a healthy work/life balance.

Alice Waagen:  When it comes to compensation market data, how sound is this information — especially after the unusual compensation practices that we’ve seen in this downturn?

John White:  I am not sure there is a major impact here.  It is true that the data collected in the downturn will reflect stagnant or even reduced salaries for certain positions.  Organizations will need to be careful how they use this data in setting their compensation plans.  More important than the data, perhaps, is the fact that businesses will need to think strategically about where they are setting their compensation targets in comparison to their competitors.  Even though salary budgets will remain tight, some organizations may want to position themselves slightly above market so that they will be able to attract and retain key employees once the economy recovers.

Alice Waagen:  Before the downturn, a number of the larger organizations were aggressively using stock and stock options as an attraction and retention tool. Has this gone away?

John White:  No, it has not gone away. In fact, with the stock prices of many companies falling during the recession, stock options issued in the last year might turn out to be quite valuable over time.  However, the organizations that I typically work with are more concerned with “bread and butter” compensation issues like base pay and—not to be forgotten—employee benefits.

Alice Waagen:  Any parting thoughts?

John White:  The real wild card in the “total compensation” equation right now is health care costs.  At this point, no one knows what the legislation will look like and what the cost will be to businesses.  Because of this, many organizations are now in a “wait and see” mode, not looking to make changes until the situation becomes clearer.  Savvy organizations, however, are communicating to employees about the cost of the employee benefit programs. 

By taking the focus away from base pay only and shifting to a more complete view of compensation (to include employees’ benefits, bonuses, recognition programs and other forms of compensation), organizations can help employees understand the complete picture and some of the trade offs that are always involved in these important decisions.

To learn more about John’s perspective on HR practices in these challenging economic times, you can check out his website at www.jdwhite.net. His latest newsletter, which addresses the coming challenge for HR once the recession is over, is available online, here.

 

Published by Inkandescent Public Relations, Hope Katz Gibbs: Editor, Jessica Dean: Graphic Designer

© 2009 Workforce Learning
703-834-7580