Author: Jessica Marquez

Doom and gloom this past year left Kimberly Dowdell desperate for some good news.

The 26 year-old had been at her company, the global architectural firm HOK, for just six months when it began layoffs. Over the next several months the firm let go 300 people. In just the New York office, where Dowdell is based, 20 percent of the workforce was cut in three separate rounds of layoffs.

“I didn’t know that something like this could happen,” says Dowdell, who joined the firm as an architectural technician. “I kept asking people, ‘When will it get better?’ ”

A partner pulled Dowdell aside at one point to tell her that her job was safe. But HOK has gone way beyond providing assurances to its high performers, such as Dowdell. Over the past year, the firm has launched a string of initiatives to keep its 2,000 employees engaged and productive in the face of the worst recession that many of them have ever witnessed.

HOK is among a number of employers taking a comprehensive approach to engagement that taps workers’ desire for transparency, career development, meaningful jobs and a degree of employment security. “If you don’t keep people engaged, the minute things start turning around, those people are gone,” says Eli Hoisington, a designer and senior associate at HOK.

Employee engagement in general has sagged during the recession, most studies show. While turnover rates have been low amid the dismal hiring climate, experts agree that employees overall and key talent in particular will look to leave companies that have done little to win over workers during the hard times. What’s more, dedicated, motivated employees can boost the bottom line and may be crucial to sustainable business success. Not surprisingly, engagement has become a top priority for HR leaders.

Trust equals engagement
Even before its first round of layoffs in December, HOK’s HR staff began discussing how it was going to keep morale up and keep its employees excited about what they do, says Marsha Littell, senior vice president and director of training and organizational development in the St. Louis office of HOK.

“When you lay people off, you often lose the best people because they don’t feel like it’s a stable environment,” she says. “Keeping people active is really important because if people are just sitting there in between projects, it just gets worse.”

When business slowed down, HOK had to make particular efforts to keep employees excited about being with the company. That requires a fair amount of internal marketing, Littell says.

At the same time, HOK has made it a point to keep in mind that a large percentage of its workforce is under 35, an age group that’s known for wanting to continuously learn, invest in their careers and exercise their entrepreneurial spirit. Littell and her team have spent a lot of time discussing what could keep these employees excited.

To that end, for example, HOK launched a blog last spring. Littell invited 30 of its employees to regularly contribute to what’s called Life at HOK.

The blog serves multiple purposes, Littell says. For managers and HR, the blog serves as a way of gauging the mood in HOK’s various offices around the world. But it also shows that the company has a significant amount of trust in its employees who contribute to blog on topics ranging from the professional, such as sustainable design topics, to the personal, such as a bicycle race just completed or discussions about a new supermarket in the area.

“No one edits what I am writing and I don’t have to run my ideas by anyone,” says Dowdell, who started blogging in March. “It shows they really trust me.”

Trust overall has been a casualty of the downturn and has become a priority for employees. “Trust/confidence in management” was among the top reasons employees gave for leaving an organization in a recent survey by advisory firm Watson Wyatt Worldwide.

HOK also has made it a point to use its intranet site to promote the various projects the company has won this year, Littell says. “Early in January and February there was really a sense of uncertainty around how bad this was going to get,” she says. “So we made a concerted effort to share new project wins using our intranet site.”

HOK’s management also did everything it could to minimize the number of layoffs it had to do over the past year, Littell says.

Part of that effort was an expansion of HOK’s talent exchange program, where employees can switch positions with someone in another office for three months and have their living expenses paid.

Since HOK managers saw that a lot of projects were winding down, HR made a concerted effort this year to see if it could move employees to other offices for a few months, says Marta Willgoose, an HR manager in the New York office.

Last summer—knowing that layoffs would be coming—Willgoose put out an ad in the New York office seeking employees who would want to move to San Francisco for six months, living expenses paid. “That was a way to reduce headcount here and keep people within the company,” she says. “And it also showed people the bigger picture—that we are doing everything we can to save jobs.”

Globally, HOK has shared 18 employees with other offices to save those jobs.

HOK’s HR team has also held special training for its managers to make sure that they maintain open lines of communication throughout the layoffs. The New York office ran a day-and-a-half seminar discussing the different issues around employee engagement and how to recognize the difference between an issue that supervisors can handle and one that needs to go to HR, Willgoose says.

Similarly, right after the first major round of layoffs in December, an employee complained to Willgoose that there wasn’t enough transparency around the layoff process.

“I called a meeting with all the managers in the office and told them that when we have reductions, we can’t just have a staff meeting. They have to foster the lines of communication and sit down and have conversations with their staffs,” she says. Specifically, Willgoose encouraged managers to sit down one on one with their reports.

Dowdell says that having that open line of communication helped her stay focused. “It was just good to hear that I was going to be OK,” she says.

Commitment to service
Dowdell participates in the ACE Mentor Program, an architecture, construction and engineering mentorship program for high school students. Dowdell’s managers have no problem with the fact that during the school year she has to leave early once a week to attend these classes, she says.

She is also on the board of the National Organization of Minority Architects as well as on the Association of Real Estate Women.

“One of the reasons I came to HOK was because of their commitment to service,” she says. It says a lot about HOK that the firm continues its service efforts amid hard times, Dowdell says. “It means a lot to employees in my age group to have that,” she says.

In fact, HOK keeps track of how active employees are in outside architecture-related organizations to determine how engaged they are, Willgoose says.

“We are currently rolling out an initiative to track how people are reaching their own professional goals,” she says. “Are people out there in the community doing lectures, getting involved with groups, taking interest in teaching? … These are all indicators of how engaged they are.”

Another thing that HOK’s New York office did last fall was to establish a series of networking committees where officers and junior employees could discuss issues. For example, HOK W is a women’s group that also invites outside women in the industry to speak. The Social Committee identifies opportunities for the office to get together socially, and the 4.44 group is a designer network where designers come together every fourth Thursday to discuss designs people are working on.

“In a big firm like this there is a natural tendency for different groups to break into different studios because that is the right way to design,” says Hoisington, one of the founders of 4.44. “The idea behind these sessions is to break down those silos.”

Each of those networks aims to serve that purpose, Willgoose says.

“It’s great to get to interact with women who I normally wouldn’t see,” says Dowdell, who is a member of HOK W.

Even just getting people together for a softball game or after-work drinks keeps people excited about coming to work, Hoisington says.

“I don’t know if you can call after-work drinks engagement, but I think it’s something,” he says.

Although HOK’s HR team prides itself in keeping its culture intact despite the reductions in staff, the company hasn’t conducted a formal employee engagement survey in a few years.

“There is sort of a sense of you don’t want to ask if you can’t do something about it,” Littell says.

However, HR managers like Willgoose make a point to continually have one-on-one conversations with employees and to keep track of the firm’s blog to gauge people’s mood. “We are not a huge corporation,” she says. “I think to overdo it with surveys is to kind of push a more corporate approach, and that’s not what people are responsive to.”

Willgoose and Nikki Duffner, a corporate recruiter at HOK, are putting together groups of employees at offices across the globe who will provide feedback on things they would like to see at their offices as well as things that they would like the entire company to focus on, Willgoose says.

“The idea is to provide a mechanism for conversations regarding professional development, coaching, project innovation, sustainability, resource improvement and wellness to happen and for us to have a means for capturing those ideas and focusing in on what people are really asking for,” she says. The company hopes to establish the groups next year.

For Kimberly Dowdell, one more change has come to pass—and she thinks it’s a good one. In an October 27 post on the Life at HOK blog, she said that she is transitioning from her job as an architectural technician and will instead work in the New York office in a public relations and business development role. She thanked her colleagues, including Willgoose, and the office’s management committee for their vote of confidence in her abilities. “There are not a lot of firms that would give me this opportunity,” she wrote.

Every few months or so a new study is published that indicates how women need more help planning for retirement than men do.

The reasons include the fact that on average women are expected to live longer than men (to age 80 versus 74), they work an average of 12 years less than men over the span of their lifetimes, their earnings are 77 percent less than men’s earnings on average, and rates of divorce have risen and are expected to further increase.

As a result of these and other factors, women’s median income post-retirement is expected to be 58 percent of what it is for men, according to the Women’s Institute for a Secure Retirement, based in Washington.

And even more concerning is the fact that many women seem to be aware of their predicament. A recent survey conducted by Financial Finesse, a Manhattan Beach, California-based financial education company, found that only 12 percent of women know that they are on target to replace at least 80 percent of their income in retirement.

Despite these facts, many employers are wary of targeting women with financial planning education, experts say. “They feel like if they do something separate for women, they will be subject to criticism for singling them out,” says Anna Rappaport, a Chicago-based retirement planning consultant.

But that has started to change. As the entire retirement benefits industry increases its focus on how people, particularly the baby boomers who are now retiring, will be able to live off their savings, the issues that women face seem even more daunting, experts say.

As a result, many employers are asking their providers to craft retirement planning seminars targeting women, employers and plan providers say.

“Companies are just now talking about longevity risks—or the risks of people outliving their retirement—and it’s a great avenue to address women,” says Barbara Hogg, senior retirement consultant at Hewitt Associates. “We are seeing more companies saying they want to do financial education that weaves in women’s issues.”

Diversified Investment Advisors, a Purchase, New York-based 401(k) plan provider, has just started doing retirement seminars for women in the past couple of years. To date, the company has conducted sessions for 28 clients but also has started to include many of these issues in its mainstream seminars, says Scott Coopersmith, vice president of participant communications at Diversified Investment Advisors.

“Many employers may not want to advertise sessions as for female employees only because they don’t want to be seen as excluding male employees,” Coopersmith says. “But they do say these are issues that tend to be of interest to working women.”

Although many employers are hesitant to do women-only retirement planning seminars, many providers and educators are increasingly being contacted by women’s groups within companies to do sessions, experts say.

“We get pulled in by the women’s initiatives within a company to do presentations quite often,” says Cindy Hounsell, president of the Women’s Institute for a Secure Retirement.

Given the fact that 75 percent of Aetna’s workforce is female, the Hartford, Connecticut-based company often keeps women’s needs in mind when crafting financial education workshops and materials, says Carol Klusek, head of retirement and financial benefits.

But in May, Aetna went beyond that to target women by offering its Mothers at Work resources group a workshop on personal financial basics.

“These women are busy taking care of their kids—and between motherhood and their jobs, financial matters can take a back seat,” Klusek says. “We have heard from young mothers that they know they have to save more.”

Reaching out to working moms is also why Annette Grabow, manager of retirement benefits at M.A. Mortenson, is looking to offer financial education seminars targeting women. The Minneapolis-based construction company, which has 2,700 employees, has a number of single mothers in its workforce, and Grabow would like to reach out to them, she says.

“They really have a harder time and it appears to me that often they are scared of not being able to survive now and sort of stick their heads in the sand about the future,” Grabow says. She hopes to find a provider that can work within the company’s budget to offer seminars early sometime next year.

Wooing women
Companies that want to target women need to understand how they process information is often different from how men do it, experts say.

“I have found women are visual learners,” Hounsell says. “They want concrete information of what to do, not the history of 401(k) plans.”

When crafting materials targeting women, Hewitt focuses on appealing to emotional themes, rather than just providing information, Hogg says.

Financial Finesse, which has seen a pickup in interest from employers wanting to target women with education, tries to emphasize big life themes that appeal to women, president Liz Davidson says.

“Women think bigger picture about finances, which means they want to send their kids to colleges, and they want to retire when they are ready,” she says. As a result, Financial Finesse often uses children in its marketing materials targeting women and tries to keep it light, Davidson says.

“We make it about changing their lives,” she says.

Financial Finesse has also found that women tend to call in more than men and prefer one-on-one assistance rather than online tools. Twice as many women call Financial Finesse for assistance than men do, Davidson says.

“If your workforce has a lot of women, don’t discount in-person education,” she says. “You might think you are saving money by just doing things online, but you may not be getting to where you need to be.”

As discussions around the Employee Free Choice Act heat up in Congress, employers are stepping up their communications to employees about the benefits they offer as a way of combating unionization efforts.

Too often employees aren’t aware of all the benefits that their employers offer them, making unions’ claims of a better life all the more appealing, says Joseph Lazzarotti, a partner in the benefits group of Jackson Lewis. “Unions are just making these general statements that if employees join, their lives will be better without anything on the other side coming from the employers,” he says.

And with retirement benefits and health care issues of such great concern to employees given the economic downturn, union organizing efforts have really focused on benefits, experts say.

As a result the number of companies that are stepping up their communications efforts around benefits is skyrocketing, says Steve Peterson, a principal in the communications practice at Hewitt Associates. While Hewitt had a handful of firms doing this a few months ago, it now has more than 20 companies adopting these strategies—many of which have just started in the past few weeks, Peterson says.

“This is definitely one of the hottest things we have seen for the year,” he says.

Employers’ concerns about union activity have grown this year as a result of the Employee Free Choice Act, which if passed would make it easier for unions to organize. Smart companies are being proactive and getting in front of potential union campaigns by getting their communications out first, says Michael Sullivan, a principal in the labor and employment practice of Goldberg Kohn in Chicago

“A lot of times firms don’t start doing this kind of communication until they have received a union organizing petition, and by that point it’s characterized as union-busting,” he says.

Also, unions’ promises of a better life often are not necessarily accurate, says Michael Lotito, a partner at Jackson Lewis.

“There have been several studies that show that union pension plans are terribly underwater,” he says.

Unions argue that if employees were represented, they could increase their wages, Lotito says. By better explaining how much companies are spending on benefits, employers can help workers understand how their total compensation is actually much higher than they thought it was, he says.

“At a typical company, the cost of employees’ benefits could be adding 30 to 40 percent to the worker’s take-home pay,” Peterson says. “But employees don’t usually see it that way.”

To clarify this point for employees, more companies are customizing their benefits communications to illustrate how elements such as a 401(k) match, profit sharing and, if applicable, a pension add to the employee’s retirement nest egg, says Liz Davidson, CEO of Financial Finesse, a Manhattan Beach, California-based provider of financial education.

Traditionally, Financial Finesse’s retirement workshops would be more focused on the overall retirement picture, and include such elements as Social Security and outside investments, she says.

But today, more employers—especially those in the manufacturing sector—are asking the firm to focus their retirement seminars on the specifics of what the employer offers, Davidson says.

“We are getting much more into the specific benefits and digging into the numbers,” she says.

While Financial Finesse has always had some clients that used benefits education as part of an effort to deflect union organizing activities, Davidson says she has seen a huge pickup this year.

“In the past, particularly among manufacturing clients, it might have been something on their minds particularly,” she says. “But now it’s always part of the conversation.”

To design an effective benefits communication program that will counter union claims, companies need to understand where their vulnerabilities are, Peterson says.

Companies can use tools such as employee satisfaction surveys to identify which benefits are most important to their workforces, he says. “For example, they can see if employees at a certain plant or location are really unhappy about the 401(k) match being taken away,” he says.

Once that is figured out, companies need to train their frontline managers on all of their benefits and make sure that the message gets communicated effectively, he says.

Companies that are already doing this are also making sure to have tracking mechanisms in place to determine how effective their communications strategies are in deflecting unionization efforts, Davidson says.

“They can see which plants are high-risk, medium-risk or low-risk and then see if there is progress after a communications campaign,” she says.

While communicating benefits can help counter unionization activities, it really should be part of an employer’s ongoing workforce management strategy, experts say.

“Training people about what benefits they have and how to use them is essential because you are paying for these benefits anyways,” Sullivan says.

Even after 28 years as an HR executive, Ed Evans could barely sleep in the days leading up to his company’s layoffs.

“Even if I wasn’t doing the layoffs myself, I still was kept up at night,” says Evans, who retired from Phoenix-based Allied Waste in February after the company’s merger with Fort Lauderdale, Florida-based Republic Services was completed. Before he left, Evans helped oversee the integration of the two companies, which included the layoff of 800 employees.

That kind of anxiety for HR professionals seems to be exacerbated by today’s uncertain economic environment, as many are finding themselves on their fourth or fifth round of layoffs in the past 18 months and consequently under mounting personal and professional pressures, according to a recent survey by Workforce Management.

The HR Anxiety Survey, conducted May 26-June 3, also elicited some disturbing responses from the 372 respondents: Some say they drink more alcohol or have taken up smoking cigarettes; a large number are considering a career change; still others complain that they are called the company’s “Grim Reaper” behind their backs. What’s worse, few who are feeling stress have followed their own advice to use company-sponsored assistance programs.

“HR professionals are supposed to be the organizational caretakers at their companies,” says Francie Crosby, a licensed professional counselor at Cope, a Washington-based employee assistance program. “But what happens when they are having trouble taking care of themselves?”

And when they aren’t conducting layoffs, they are planning for them. In interviews with Workforce Management, a number of HR managers said they have spent anywhere from 20 to 50 percent of their time in closed-door meetings reviewing their workforces and helping managers decide who was going to get cut if another round of layoffs was necessary.

“It’s just so difficult because you have spent so much time hiring these people and making sure that you have the right staff in place, and then you have to spend hours figuring how to make reductions to meet profit margins,” says one 30-year-old HR manager at a New York-based professional services firm.

As a result of the ongoing nature of today’s massive workforce reductions, the majority of these HR managers say they are experiencing sleeplessness, increased anxiety and depression, while a few are using substances to cope, according to the survey.

For companies, the implications could be costly. Almost half of HR managers who have conducted layoffs in the past 18 months say their stress over the layoffs has affected their job performance, according to the survey. But a bigger potential problem for companies is that they could lose their HR staff. Thirty-five percent of respondents have considered or seriously considered changing careers, according to the survey. In interviews, they cite burnout and low morale as reasons that they are thinking about leaving. An additional 3 percent have already begun the process of changing careers or jobs.

Companies also need to think about the possible health problems these HR managers may experience, experts say. A 2006 study conducted by Leon Grunberg, a sociologist at the University of Puget Sound in Tacoma, Washington, followed 410 managers over 10 years and found that those involved with layoffs were more prone to sleep problems, ulcers, headaches and heart trouble up to three years after the layoffs.

“That could mean higher costs to the employer,” says Sarah Moore, professor of psychology and an associate academic dean at the University of Puget Sound.

Taking into account the implications of layoffs on those who must conduct them isn’t something that is on most companies’ radar screens, experts say.

While many employers offer outplacement services for employees being laid off, very few are focusing on the psychological implications of conducting layoffs for the HR managers.

Stressful times

For many HR managers, this is the first time they have had to conduct multiple rounds of layoffs within months, experts say.

“In the past a company would cut a large number of people and be done with it,” says Ilene Gochman, practice director, organization effectiveness at Watson Wyatt Worldwide. “But today, it’s chunks at a time.”

Forty-eight percent of respondents to Workforce Management‘s HR Anxiety Survey say they have conducted three or more rounds of layoffs in the past 18 months. Forty percent say they expect another round of layoffs by the end of the year, while 26 percent say they are certain there would be another round.

The survey also found that 66 percent are worried about losing their own jobs, while 7 percent had already lost their jobs.

“Everyone is concerned about their jobs right now,” says Shirley Babbitt, HR manager at Eugene, Oregon-based Lanz Cabinets. “We are dependent on people remodeling or building new homes, and that’s just not happening.”

Not surprisingly, 73 percent of respondents say they are somewhat stressed, depressed or anxious as a result of having to conduct layoffs, while 11 percent say they are extremely so. Fifty percent have experienced some sleeplessness, while 17 percent say they have experienced frequent to extreme sleeplessness.

Twenty-three percent of respondents say they have occasionally used a substance to cope with anxiety, while 7 percent say they are frequently doing so.

“I am definitely drinking more, and I started smoking again after quitting for two years,” says a 30-year-old HR manager at a New York-based professional services firm that has conducted four rounds of layoffs since August. Almost half of the HR managers surveyed (49 percent) say their increased anxiety has affected job performance.

“Definitely for a while I wasn’t as engaged in my job,” says a vice president of HR at a financial services company who participated in the survey.

After laying off 2,000 people within four months, the HR executive says it was difficult to get excited about the job. “I have thought of changing industries or being a stay-at-home mom,” she says.

Many HR managers find themselves emotionally distancing themselves from their employees.

“You almost don’t want to get too close to them because it hurts worse when they have to leave,” says Laura Rhode, HR director at Bonita Springs, Florida-based Sunshine Ace Hardware Stores. (Rhode did not participate in the survey.)

Emotional distancing is a common trait among managers who conduct layoffs, according to the University of Puget Sound study. In interviews for that study, managers who had conducted layoffs were more likely to report increased distancing behavior than those managers who had not been involved in layoffs.

And even if HR managers aren’t distancing themselves from employees, some are finding that employees are distancing themselves from HR.

Twenty-five percent of respondents say that employees have treated them differently since the layoffs at their companies.

One survey respondent refers to a lack of trust from employees who view HR “as the enemy.” Another respondent says employees use terms like “Angel of Death” and “Grim Reaper” when HR walks into a room.

Reaching out

Despite suffering from sleeplessness and anxiety, very few HR professionals are reaching out to professionals for support, including their employee assistance programs.

Only 9 percent of respondents say they have reached out to professionals, such as their EAP, for assistance.

“It’s a little distressing that they aren’t reaching out to EAPs, because if the HR person doesn’t have confidence in the EAP, then you have to wonder about the average employee,” Gochman says. “But it could also be that the HR person feels that this is part of their job and they should have the strength to deal with it.”

Instead of reaching out to professionals, several HR managers said in interviews that they were reaching out to other HR professionals within and outside the company.

“I have reached out to some of my HR friends at other companies and they have been incredibly helpful,” says Babbitt of Lanz Cabinets, which laid off 27 people in May. “We are really leaning on each other right now to make sure we are doing the right thing and to support each other.”

Some respondents said in interviews that they would love the ability to join a formal support network on this issue, but recognize that it could be a touchy subject. “Everyone recognizes that layoffs occur, but once you put together a formal network of HR managers to support each other, it will scare the crap out of folks,” said one recruiting manager at a global law firm.

The most common way that employers try to prepare HR for conducting layoffs is through training. Sixty percent of respondents say they received training or materials to help them conduct layoffs. Ninety-nine percent of those respondents say the training they received was helpful.

While training can help, HR professionals say the best way to alleviate some of the anxiety associated with conducting layoffs is to make sure they understand the business strategy behind them.

“Too many companies leave HR in this 100 percent HR role and don’t let them understand the business,” says Evans, the retired Allied Waste HR executive. “The more they can help them understand the business strategy, the easier it is for HR—particularly more junior HR professionals—to do these kinds of things.”

Giving HR the chance to reduce the number of layoffs or come up with alternatives can also help alleviate their stress and give them more of a sense of control.

For example, at Sunshine Ace Hardware Stores, Rhode suggested brainstorming with employees about ways to avoid layoffs. Together, the workforce of 340 employees came up with the idea of cutting back everyone’s hours, which helped the company avoid layoffs.

Similarly at Lanz Cabinets, the company’s president, Brent Lanz, is trying to see to it that all 27 people who were laid off in May will be able to return to their jobs after the summer, Babbitt says. “He is out there beating the streets for sales,” she says. “It definitely made it easier to deliver the news knowing that.”

Employers also can help HR managers get through these difficult times by focusing them on rebuilding the company’s culture post-layoffs, Watson Wyatt’s Gochman says.

“Companies want to get HR focused on the people who are staying and how can they get the business to turn around,” Gochman says. “It gives HR more of a sense of control and helps them be proactive.”

The good news for HR is that many understand that as difficult as these times are, they will pass. Only 19 percent of survey respondents say they believe that their current anxiety will have long-term effects on their job performance.

“The layoffs will stop at some point, and then HR can focus on rebuilding,” Gochman says. “The things that brought HR joy will come back.”

Workforce Management, June 22, 2009, p. 18-23 — Subscribe Now!

Despite indications that unemployment has bottomed out, more than half of HR professionals say their organizations will conduct more layoffs by the end of the year, according to Workforce Management’s HR Anxiety Survey.

According to the survey, which was conducted from May 27 through June 3, 40 percent of the 356 HR professionals answering the question said they think their companies might have another round of layoffs by year-end. Twenty-six percent said they were certain that there would be more layoffs.

These responses seem to contradict recent data that indicate that unemployment has bottomed out. The Conference Board’s Employment Trends Index for May showed a 0.2 percent uptick from April. The moderation indicates that “the decline in job losses is real and signals that the worst is over,” says Gad Levanon, senior economist at the Conference Board. The index is based on a number of factors, including the number of job openings; initial claims of unemployment insurance; and the percentage of respondents who say they are having difficulty finding jobs.

The fact that such data seem to conflict with HR managers’ perceptions might not necessarily be a contradiction, Levanon says.

“We will still see job losses in the second half of 2009, but they are going to be more moderate than what we have seen in the first half of the year,” he says. “There were 349,000 job losses as of May 2009, compared to an average of over 600,000 for the six months before that.”

Recent data released by Mercer supports the notion that while layoffs may still be in the offing for the remainder of the year, the number of jobs being slashed is decreasing. While 58 percent of employers surveyed by Mercer say they plan cuts to their workforce this year, only 5 percent plan deep cuts (more than 10 percent of their workforces).

“I think at most organizations there is a recognition that we aren’t at the bottom yet, but we are near the bottom,” says Steve Gross, global leader of broad-based performance rewards consulting at Mercer. “A lot of my clients who were hunkering down three to four months ago are now starting to talk about plans for 2010.”

Also, many companies are laying off low- or poor-performing employees in an effort to take advantage of the number of talented people out of work right now, says Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School.“This is an opportunity to up-skill their labor,” he says.

Gross agrees that this is likely to be the case, particularly at smaller companies that can’t afford to have poor performers.

“Every company has 5 percent that they wish weren’t there,” Gross says. “I think most of those people are gone now.”

As a former HR executive at Wal-Mart and American Airlines, Sue Oliver has spent a lot of time focusing on how to get the most out of employees. Today, as many employers are laying off staff, cutting pay and slashing benefits, they are doing it with a smaller workforce. Oliver, who earlier this year founded her own consulting company, Katana Partners (named after a type of Samurai sword), says the key is that companies must analyze employee behaviors and use that to keep them engaged. Oliver recently spoke to Workforce Management New York bureau chief Jessica Marquez.

Workforce Management: Why is employee analysis so important for employers and what does it mean?

Sue Oliver: Most often employees are 50 to 70 percent of companies’ expenses, but yet most companies don’t have any rigor around the kinds of data they collect about employee and managers’ attitudes. Simply doing some kind of segmenting like cluster analysis allows a company to understand what the segments of employees and managers are and what is driving the attitudes and behaviors from the top segment—who are usually the most high-performing, most productive workers that can be a company’s brand ambassadors—to the bottom segment, who are the most disenchanted.

WM: How can companies address “survivor’s guilt” that many remaining workers feel after layoffs?

Oliver: Communication is really the biggest benefit that a company can provide in a difficult time like this. I know that there are sometimes things that are confidential, but companies can be upfront about that. You want employees to feel valued and that they are being listened to, even if the news they are getting isn’t good news.

WM: Is there a way of conducting layoffs that can make the impact less harmful on the remaining workforce?

Oliver: If there is time, involving employees in any sorts of choices that are possible can be helpful. For example, saying, “If we don’t get this contract, we have estimated that 250 of our employees are going to have to be let go. We are also willing to consider a number of other options and we have five days to consider those options.” Let employees understand the business case. At American Airlines, we conducted a lot of layoffs after 9/11, but we were able to offer up part-time work and ask employees if they were able to job-share. Let people have a choice if you can.

WM: What else can companies do to help employees feel more in control during these difficult times?

Oliver: The other part of this is keeping in touch with people and understanding their issues. For example, I was talking to a prospective client last week and they had a 5 percent management pay cut, and had taken away the 401(k) match and were lamenting on how to get the workforce to rally back. They decided to extend casual Fridays to Mondays. Now there is no doubt that some employees appreciated that, but they are just guessing at what could make a difference in employee morale without knowing anything concrete.

WM: What would you say to those employers that believe they don’t have the time or resources to do the kind of analysis you suggest?

Oliver: Any amount of investment dollars put into this will be realized within six to 12 months. You can even do it with an online survey, which is very inexpensive. Companies need to figure out how to achieve a greater percentage of employees who are higher performers. The reason for that is at most companies, 10 percent of the workforce is bottom performers. If the company believes that each of those employees can affect $1,000 of business over a 12-month period, they can make up that difference by addressing their productivity.

Many employers today are finding the need to shift course given the changing economy, but they don’t have the leadership they need to do so. In hard times, firms want executives who can make difficult decisions and not worry about relationships, experts say. And that’s why more employers are turning to temporary executives.

Los Angeles-based Business Talent Group, which has more than 1,500 temporary executives and 100 clients, has seen its business grow 47 percent year over year since its inception 2½ years ago. “We hear a lot from companies that want to bring in an interim executive to deal with a turnaround or crisis and who can make tough calls and be the bad guy,” COO Amelia Warren Tyagi says. “And then the next person can come in and rebuild loyalty and culture.”

Workforce Management New York bureau chief Jessica Marquez recently spoke to three temporary executives who work with BTG—William Kuehn, who often temps as an interim CEO; Philip Deming, who temps as a head of HR; and Sydney Drell Reiner, who temps as a chief marketing officer—about their experiences.

William P. Kuehn
Consultant, interim CEO

Workforce Management: How did you get involved in temporary executive work?

William Kuehn: I had my own business, Bolstad Industries, for several years through the mid 1980s. I decided to close that down during what was really in the middle of an industrial depression. Then I decided to go into turnaround consulting. And I found that doing that kind of work as an interim executive was preferable to being a consultant because you have the authority to make the tough decisions. Since then, I have worked as an interim CFO and CEO and interim COO at a number of companies in health care and technology.

WM: Do you prefer this to a permanent position?

Kuehn: There is always a permanent job that I would enjoy, but the danger in a permanent job is that it could become stale and you could become a caretaker. One of the things that I find very attractive about interim executive work is that you are constantly learning and growing as a person.

WM: What are the advantages for employers in hiring temporary executives?

Kuehn: Often when a company wants to bring in a new CEO, they don’t want to wait four to six months to conduct a search and find the ideal person, so this is a way of addressing that. The other thing is if you have nasty things that need to get done, you want someone who is willing to take the rap from employees or shareholders for making the difficult decisions. Then the new person doesn’t get tagged with having made those decisions.

WM: What are the challenges for employers in bringing on interim executives?

Kuehn: The biggest challenge is finding someone who is qualified. Companies also need to make sure that the other executives are on board with the hire, and that the hire has the authority to make decisions. Finally, interim executives don’t have the benefits of knowing all of the personalities and the culture of the company, so it’s important that someone makes him or her aware of those issues.

WM: What are the challenges for the interim executive?

Kuehn: Again, there is the challenge of coming into a company that you don’t know. Also, the executive needs to make sure that they are well-received by other executives so that they can work together as a team.

Philip Deming
Consultant, interim HR chief

WM: How did you get involved in doing interim HR work?

Philip Deming: I was at a company where the chief administration officer got caught embezzling money, and so we terminated that person and I took on the role along with my existing responsibilities as head of HR. That was 15 years ago.

WM: Being the head of HR requires having a good understanding of the organization and the employees. When is it appropriate to have an interim head of HR?

Deming: I usually get involved where a company is getting out of a crisis. For example, one client I just worked with had come out of bankruptcy and terminated their chair of the board and the CEO. People were devastated and they needed someone. So I came in and handled the human capital issues and helped establish some stability.

WM: Isn’t it challenging though to come in as an interim HR executive when you don’t know the employees?

Deming: Most HR people don’t like to lay off people and do restructurings. After you do something like that, it permanently affects your relationship with the existing employees. So in that kind of situation it’s helpful to have an interim HR executive.

WM: What are the challenges that a company may face in bringing on an interim HR executive?

Deming: HR always needs the full support of senior management. Companies need to make sure that is the case.

WM: What are the advantages for the company in hiring an interim HR executive?

Deming: I remember being called in by a CEO at one client who told me that they wanted the best and brightest. I told them, ‘No one is going to work for this organization.’ So having the advantage of an interim executive is that we can say things that are politically threatening. I have no political agenda.

Sydney Drell Reiner
Interim chief marketing officer

WM: After years of working in top marketing positions at large companies, you decided to go temp. Why?

Drell Reiner: For me it was a lifestyle decision. I have a little girl, Hayley, and I loved my career, but I was working 80 hours a week. Being an interim executive allows me to do what I love doing but I don’t have to commit to a long period of time.

WM: What are the advantages to employers in bringing on an interim chief marketing officer?

Drell Reiner: I think there is a certain advantage in having someone with complete objectivity. You don’t have a vested interest. It’s not your stock options on the line.

WM: But couldn’t that be a double-edged sword for hiring companies?

Drell Reiner: Well, you still have a reputation to protect. And you are being brought in for a specific purpose, so to that extent the accountability is very high.

WM: What are the challenges for employers in hiring an interim marketing executive?

Drell Reiner: One thing companies need to really think about when hiring an interim marketing executive is how well they will work with the product development people and the research people. That’s still important even if it’s a short-term position.

WM: Other interim executives have said that they are often brought in to deal with a crisis. Is that true for you?

Drell Reiner: Well it’s a little bit of a case of the chicken and egg. If a company is looking to hire an interim chief marketing officer, it often means that they aren’t ready to pull the trigger on hiring a permanent person. They know they are going through some big change and they don’t know if they will keep that role.