Archive for March, 2009

Work+Life Flexibility Crossroads—Will We Go Forward or Backward?

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In February, 2008, as the recession clouds started to gather, I posted a prediction of what would happen to work life flexibility when the storm broke.  I knew we’d arrived at the crossroad I envisioned last February, when I read this week’s Washington Post article, “As Cuts Loom, Will Working From Home Lead to a Layoff?”  The experts, employees, and managers interviewed (as well as people commenting online) recognize and express the knee-jerk response I feared then, “Forget flexibility, people are just luck to have jobs.” 

The question becomes whether this backward-looking response will prevail, or will the wisdom of the organizations that recognize there’s no going back on workplace flexibility if their businesses and the people who work for them are to succeed?  Instead of a “policy,” “benefit,” “program,” or “arrangement” reserved for good times,  will flexibility take its rightful place as a way of operating, as part of the culture and core strategy?  For more information on what using work+life flexibility as a business strategy means, check out video highlights from speeches I gave recently on the subject. 

In a nutshell, flexibility helps an organization manage costs and resources (e.g. real estate), service clients, helps employees manage their work+life fit, improves environmental sustainability and creates an environment of innovation:

  • Many companies are actively using flexibility to reduce labor costs and minimize layoffs in the recession.  And, as CV Harquail points out in the Authentic Organizations blog, there are important leadership opportunities in flexible alternatives to layoffs that go beyond the labor cost savings. 
  • Just this week I learned that Johnson Space Center incorporates work+life fit into their Inclusion and Innovation Initiative.
  • Astellas Pharma reduced employee schedules on Friday without reducing salaries so they can have a better “balance.” 

Not every organization is turning back the clock to 1985.  Many are moving flexibly into 2009 and beyond.  As we decide which path to take—to go forward or go back—here’s my post from February 1, 2008 that outlines the choices.  There’s still time. 

Over the past couple of weeks, I’ve been repeatedly asked: “What do you think will happen to work+life fit and flexibility if the economy experiences a recession?”

I think two things will happen. Unfortunately, too many leaders and organizations will default to a shortsighted fall back position, “Forget flexibility. People are just lucky to have jobs.” But the smart leaders and organizations won’t. They will continue to move forward integrating flexibility into the way they do business because they understand that there is no turning back. To use a recession as an excuse to stop developing news ways of flexibly managing work and life will only put them further behind in terms of growth potential when a recession ends.

What do these smart leaders and organizations know that the less enlightened overlook? They understand that flexibility is key to their businesses success in a 24/7, high tech, global work reality. They know that:

Even in a recession talent will still be a scare commodity (see the results from PriceWaterhouse Cooper’s recent Global CEO Survey). If organizations hope to hold on to valuable talent (especially employees under the age of 30) once a recession ends they better do all they can now to win employee loyalty and be the employer of choice. And finding a better work+life fit is very important to a majority of the workforce. As a leader in a professional services firm recently said to me, “Back in 1975, there were 30 resumes for every job. Now there are 10 jobs for every qualified resume.” That ratio isn’t going to change drastically with a recession (Update: I obviously didn’t foresee the growth in layoffs as the recession unfolded. I would have moved the last two bullets up to the beginning);

You can’t effectively service global clients and manage global teams without flexibility that considers impact on work+life fit. Domestic employees can’t be on the phone all night with Singapore and then haul themselves into work the next day 8-to-6. Clients and teams in other countries can’t always be expected to be the ones to make the early morning/late night concessions. Organizations aren’t going to stop operating globally because of a recession;

In a recession, more needs to be done with fewer resources. It’s even more critical that your employees are at their most productive and your workflow and communication management is at its most efficient. Studies show that flexibility to help employees manage their work+life fit results in increased productivity, more efficiency, and better communication.

Finally, companies that need to cutback will use flex to creatively downsize. By offering to reduce schedules or a transition people to project-based, consulting work, employees who otherwise would lose their tie to the organization can stay. When business turns around, those companies then have the option of offering those employees a return to a full-time schedule.

So which direction do you think the leaders of your organization will choose as we move further into the recession? Will they follow the knee-jerk retrenchment where all innovation related to work+life fit and flexibility not only halts but reverses as people fear for their jobs? Or will the recognition that flexibility is more important that ever to manage time, talent, and workflow prevail?

Fast Company: “Fairness” of Flexible Alternatives to Layoffs

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Professor Tom Davenport of Babson College recently wrote on interesting post on entitled, “Is Forced Time Off Fair?”  He challenges the “fairness” of flexible labor cost savings strategies such as reduced schedules/salaries, unpaid vacation days, job sharing, and furloughs.  And he warns of unintended consequences like losing people who don’t want to participate.  While he raises points worth considering, even most of the commenters responding to the post on the site agree—these alternatives may not be completely “fair” but they are necessary in many cases, and are certainly better than layoffs. 

Professor Davenport starts off by saying,

One of the common approaches to dealing with this recession is for companies to ask—well, tell—employees to take time off without pay 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 lay some people off.  While I have sympathies with this philosophy, I’m not sure it’s either fair or wise.” 

A “common” approach?  Unfortunately, it isn’t common enough

There was a glimmer of good news a couple of weeks ago.  Watson Wyatt released a study that found the number of companies saying they were going to cut jobs decreased from the previous quarter.  However, as the recession drags on, the pressure to manage labor costs will continue especially since employment is a lagging indicator to a recovery. 

As I have written numerous times, a comprehensive cost/benefit analysis clearly shows that the benefits of layoffs are limited.  Even more companies should be considering alternatives to layoffs that lower labor costs but retain employees.  For inspiration, check out the Downsizing Flexibility Champions honor roll. 

What’s “fair” when hard choices have to be made to save labor costs? (Click here for more)

Personal Branding, Today and Post-Recession–Me 2.0 by Dan Schawbel

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Most of my recent blogs have focused on creatively and flexibly managing through the current recession, with a focus on flexible alternatives to layoffs.  But I continue to keep my eye on the future.  Thinking about what lies on the other side, or the post-recession workplace reality, there are trends gaining momentum in the downturn that will play key role in the future.  One of these trends is personal branding.

If you’re over 30 years old or don’t participate in social media, you may not have heard much about personal branding.  But it’s here to stay, and is something you’ll have to pay attention to in order to take charge of your work+life fit.  Good news–there’s a terrific new, easy-to-follow book that can get you started, Me 2.O by Dan Schawbel.

What is personal branding?  Here’s the definition from Schawbel’s book:

“Personal branding describes the process by which individuals and entrepreneurs differentiate themselves and stand out from a crowd by identifying and articulating their unique value proposition, whether professional or personal, and then leverage it across platforms with and consistent message and image to achieve a specific goal.  In this way, individuals can enhance their recognition as experts in their field, establish reputation and credibility, advance their careers and build self-confidence.”

Why is personal branding and the information in Schawbel’s book important today and post-recession?  Here are some specific applications:

1) We will all need to find ways to stand out in a job market where rapid change is going to be the norm, or as Schawbel says, “In today’s competitive career marketplace, you need to stay relevant to survive.  One way to achieve relevancy is to constantly acquire new skills…Incorporate these skills in your personal branding kit in order to improve your current organizational role or change career paths.”  Believe it or not, whether you work for a company or work for yourself, being mindful of your personal brand can, as the book points out, build your credibility, showcase your character, attitudes and actions in ways that “instill good feelings in others.”  In other words, having a resume and a good cover letter isn’t going to be enough.

2)  Social media is a critical, yet underutilized or misunderstood, tool for managing your personal brand especially if you haven’t searched for a job since 1997.  Schawbel points to the year 1997 as the demarcation date when social media such as blogging, Facebook, LinkedIn etc. began to influence hiring decisions in the marketplace, and I think he’s right.  As someone who has to make it a point to find time to blog consistently, update Twitter and LinkedIn, I sympathize with those who say, “I just can’t imagine finding the time to do all of that.”  The good news is that once you start, you do get into a groove and it becomes second nature.  But getting started is important, and Me 2.0 outlines in very simple terms how to begin. If you already use the various forms of social media, he also gives you some good advice on how to take it to the next level.

3)  Gen-Y may be the book’s target audience, but Gen-Xers and Baby Boomers will find it helpful too, maybe even more so. Schawbel says his book is primarily for Gen-Ys and people coming out of college, and it has case studies and examples for new grads.  But as a 44 year old with experience using social media I found the book very relevant.  And I imagine that other Gen-Xers and Baby boomers being introduced to the concept of personal branding for the first time would learn even more.

4)  If you are a parent, you need to understand how to help your child build and think about their personal brand, especially online, before it’s too late. This is one of the unexpected “ah-has” I had while reading Schawbel’s book. As a parent, it’s not just my personal brand I need to manage.  I need to make sure I understand how to guide my children to start thinking about how they are presenting themselves to the broader world via social media, because what goes on the internet lives on the internet forever.  This can effect their college and job search opportunities years later.  Every parent should read this book, especially if you are not savvy about the way social media works.

5)  Managing your personal brand involves actively managing your work+life fit. While he doesn’t specifically call it work+life fit or “balance,” Schwabel points out that the personal branding process must consider all aspects of your life.  And it will evolve and change over time as your realities change.  As he says, “You can start by asking yourself, ‘Who am I?’ This question seems simple enough, but the truth is that most people don’t truly find out who they are until later in life.”  And even then, the process of self-discovery and understanding continues.  He goes on to discuss the importance of defining “personal success,” a work+life fit concept near and dear to my heart.

To learn more about what’s new in personal branding, you can follow Dan Schawbel and other experts in the area on his Personal Branding blog, on Twitter, and on Facebook.

Let me take this opportunity to thank you for following me and work+life fit on this blog for the last three years, and more recently on Fast blog, and on Twitter and LinkedIn.  The power of personal branding to connect people and to change the world continues to amaze me!  What’s your personal brand?

Stay tuned-next week, there’s more on the post-recession workplace reality.  I will share my recent interview with Maggie Jackson, the author of one of my favorite books from last year Distracted, where we discuss the need to be less distracted and pay more “attention” in all aspects of our lives.

Fast Company–Health Benefit Costs: Fly in the Ointment of Flexible Alternatives to Layoffs

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Since February, 2008 when I first encouraged companies to consider using flexibility—reduced schedules, furloughs, sabbaticals, additional unpaid vacation days, job sharing and contract-based work—as an alternative to layoffs, I’ve gotten the same response from managers, “That’s great, but what about the health benefits I still pay for if I use flexibility?”  It’s the fly in the ointment of an otherwise straightforward business case in favor of using flexible alternatives to reduce labor costs while minimizing job cuts.  So what’s the answer?  (Click here for more)

Getting Started with Flexible Downsizing–Manager and Employee “How to”

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The research shows that flexible alternatives to job cuts are the most cost-effective, least disruptive, productivity sustaining way to reduce labor expenses in recession.  Flexible downsizing, in the form of salary/schedule reductions, adding unpaid vacation days, furloughs/sabbaticals and job sharing, not only saves money, but prepares an employer to respond when the economy turns around.  But you don’t have to tell that to Paul Levy, the CEO of Boston’s Beth Israel Deaconess Medical Center.  The hospitals 8,000 staff members overwhelmingly supported a broad range of flexible alternatives so people could keep their jobs. 

But how do managers and employees begin to create these alternative flexible solutions?  As I mentioned in an interview on Public Radio International’s The Takeaway, here some possible first steps: 

For managers, like Beth Israel’s Paul Levy, who want to initiate the conversation:

  • Estimate how much money you need to save, and don’t have any preconceived ideas about how you want to achieve that goal.
  • Go to your team and explain the situation being as transparent and upfront as possible. Communication is the key in successful downsizing—research shows it lowers the level of stress, improves job satisfaction, increases the desire to stay at company, and sustains performance levels.
  • Ask for ideas and proposals that could include reduced salaries/schedules, furloughs, sabbaticals, job sharing, and additional unpaid vacation days.
  • See how close you get to your cost savings goal with the proposals you receive.
  • If voluntary efforts aren’t enough, you could institute across the board salary/schedule cuts, additional unpaid vacation days, and furlough/sabbaticals that effect everyone equally including YOU—it’s important that managers share the pain and participate.
  • You may still need to cut jobs, but you’ve minimized the number of layoffs needed.
  • Keep reevaluating the market and economic situation, being sure to restore time and wages as soon as you can so you don’t lose people.

For employees who want to initiate the conversation:

  • If you get a sense that layoffs may be necessary, mention the flexible alternatives for reducing labor costs because chances your boss hasn’t thought about salary/schedule reductions, adding unpaid vacation days, furloughs/sabbaticals or job sharing.  By making your manager aware the potential options, you are inserting them into decision-making process early on rather than later when the decision to cut jobs has already been made. Why is this important?  Many managers are responding to my explanation of the benefits of flexible downsizing versus job cuts by saying, “I never thought of that.”  Help your manager think of it as early as possible.   
  • Then follow the same process you would if you were proposing a flex plan for personal reasons.  Only in this case you are leading with the business needs—reducing labor costs.
  • Create a plan, either individually or with a group, that outlines the flexibility you are proposing—cut salary/benefits from x%, take four week furlough during a slow time of the year, add 6 unpaid vacation days to the calendar—whatever your plan looks like.  Emphasize the costs the plan would save—salary and even benefits if you don’t’ need them.  Also, outline how you will continue to get the job done and contribute your experience and knowledge to helping the business recover. 
  • Then after your plan is approved and implemented, sit down with your manager to review periodically.  As the market recovers make sure he or she knows it’s time to renegotiate your flex plan to restore some of the lost income and time, assuming that is what you want. 

Let’s get the manager and employee conversations started and create some innovative, cost-effective flexible alternatives to reduce labor expenses and minimize job cuts.  It is a win-win for everyone.  Do you have any suggestions for starting the flexible labor cost savings conversation in your workplace as a way to manage through the recession while minimizing layoffs?

Fast Company–Yes, Layoffs Cost More than Regular Turnover and Save Less than Flexible Alternatives

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Monday, during an interview on Public Radio International’s The Takeaway, I discussed flexible alternatives to minimize layoffs because, the research shows, managers may think that firing someone who makes $50,000 a year saves $50,000 a year, but really it’s costing them between $75,000 and $125,000. 

Using flexibility, such as reduced schedules/salaries, adding unpaid vacation days, furloughs/sabbaticals, etc., is not only the least costly approach to reduce labor expenses, but it preserves the profit-generating productivity and engagement critical for recovery–personally, organizationally, nationally and globally

This conclusion in based on the detailed comparative cost/benefit analysis between voluntary turnover, layoffs and flexible downsizing that I conducted in preparation for The Takeaway interview and can be found in the table below (sorry for the size, still figuring out how to embed tables).  My primary sources for the analysis were Dr. Wayne Cascio’s book, Responsible Restructuring, and a variety of articles and blog posts in which experts agree the cost of voluntary turnover ranges from 150% of salary to 250% of salary, with a detailed listing of costs by William Bliss, of Bliss & Associates.     

As I said in the interview, some layoffs may be necessary especially in industries that are restructuring; however, as the comparative cost benefit analysis below illustrates there are actually even more costs associated with layoffs than voluntary turnover.  These are considered by business as one-time, non-recurring costs, however, they are costs nonetheless. Therefore, it’s not surprising that research shows layoffs are a short-term fix with little or no long term profit payoff:   (Click here for more)

Ready to Respond to Recovery? Another Advantage of Flexible Downsizing

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(Tune in to Public Radio’s The Takeaway on Monday morning 3/9 between 6:00-6:30 am in NYC, I will discuss how to present a flex plan to your emloyer if you think layoffs are coming.)

Right now, with the Dow dipping below 7,000, unemployment at 8.1%, and the news that the economy contracted a breathtaking 6.2% in the last quarter of 2008, it’s hard to imagine a recovery anywhere in sight.  But what happens if the Administration’s record $3.5 trillion budget and stimulus package have their intended impact?  Which organizations will be best positioned to respond to the opportunities when they present themselves—those that undertook massive layoffs, or those that used flexible alternatives to layoffs to reduce labor costs and minimize job cuts?  

This question isn’t rhetorical, and it is worth considering. Just as the rapid downturn took many by surprise, the opportunities of a recovery could present themselves just as unexpectedly.  In my comments in this past weekend’s New York Times article by Hannah Seligson, “An Alternative to Layoffs: The Shorter Workweek,” I pointed out that “if a steel company lays off employees and then suddenly gets money from the stimulus package and everyone is building bridges, they are going to be ill-prepared.”

Look at the mortgage industry.  My father, a former mortgage industry executive, brought this example to my attention a few weeks ago.  Last year when the sub-prime mortgage market began to unravel, the mortgage industry let most of its experienced originators and processors go. At the time it looked like an unavoidable move.  A few months later, mortgage rates were so low that companies were flooded with applications to refinance.  But without the experienced originators and processors, they had to hire third-party vendors, or in some cases miss the opportunity. 

Think about how different that scenario would be had the mortgage companies tried to reduce labor costs by instituting furloughs, or cutting salaries and schedules 25% across-the-board.  They may still have had to cut jobs.  But they would have retained some of the experienced talent the organization needed in order to benefit from the unforeseen change in the market–the key word being “unforeseen.”  The same flexibility that allows a company to reduce labor costs, also prepares them to rapidly gear back up. 

What industries might directly, or indirectly, benefit from the public works projects in the $789 billion stimulus package?  The projects include:

  • California High Speed Rail $45 billion
  • NextGen Air Traffic Control: $15 billion to $22 billion
  • California Drinking Water: Tens of billions of dollars
  • Gulf Ports: $1.04 billion for New Orleans; $1 billion for Gulfport, Miss.
  • Bridge to Canada: $1.8 billion
  • Dulles Airport Train: $5.2 billion
  • Seattle Highway Tunnel: $4.24 billion
  • Hudson Rail Tunnel: $8.75 billion (a personal favorite as it will make my commute to Manhattan from New Jersey much easier!)
  • Chicago Rail Network: $2.5 billion
  • Miami Port Tunnel: $1 billion
  • Second Avenue Subway: $4.35 billion. 

Then there are the “winners”in the Administration’s budget as noted in The Washington Post’s The Federal Eye Blog:

  • The Defense Department: $533.7 billion, a 4% increase over 2009
  • The EPA: 1,300 new water projects, and $475 million to restore the Great Lakes
  • National Infrastructure Bank—“The mission of this entity will be to not only provide direct Federal investment but also to help foster coordination through State, municipal and private co-investment in our Nation’s most challenging infrastructure needs.”

When you consider who might benefit from the investments listed above, the comments of Chris Simpson, a senior vice-president of the manufacturing company, Pella, in the Good Read blog make sense:

“Like many companies, Pella is looking to cut expenses because of the economic downturn. But instead of laying off more workers, the Iowa manufacturer of windows and doors is instituting a four-day workweek for about a third of its 3,900 employees. Chris Simpson, a senior vice-president at the company, acknowledges it’s an unconventional move. But Pella believes the economy could turn around faster than most people expect, and it doesn’t want to be caught short of experienced workers. ‘Our contention is, consumer confidence will rebound,’ says Simpson. ‘If there’s a (government) stimulus package of some kind, we think people are going to respond.’”

We—organizations and the individuals who make them run—operate in an era where rapid change is the rule, not the exception.  Just as many organizations were not flexible enough to respond rapidly to the economy’s downturn, will an equal number be unprepared to flexibly respond to the recovery?  And chances are, it will appear unannounced.

Fast Company: Managers Uphold Fiduciary Responsibility with Alternatives to Layoffs…

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Is a manager who pursues flexible alternatives to layoffs exercising his or her fiduciary responsibility to act in the best interest shareholders?  This is an important question because it gets at the core of what drives the decision-making that leads to job cuts as the primary way to control labor costs in the recession.

Shareholder profit is indeed a manager’s fiduciary responsibility in a publicly-traded company.  As a commenter noted on CV Harquail’s Authentic Organizations blog,

“When managers go beyond the business case for alternatives to layoffs, they sacrifice shareholder profits for the greater good. For many this proposal is a non-starter because it is inconsistent with managers’ fiduciary duties.”

Do flexible alternatives to layoffs in the form of reduced schedules and salaries, job sharing, furloughs/sabbaticals, and contract based employees, really sacrifice shareholder profits and therefore, challenge a manager’s fiduciary duty?  You tell me…Let’s expand the cost/benefit analysis and look at it from three different perspectives—the individual company, the U.S. domestic economy, and the global economy.  (Click here for more)