In today’s situations of economic uncertainty, organizations are facing challenges in several areas such as minimizing risks of job loss, retaining employees, implementing effective perks and benefit packages - all while also trying to maintain a positive culture. The aftermath of the pandemic has led to mass layoffs, prompting other cost-cutting strategies such as re-assessing employee benefits.
Striking a fine balance between cost-saving and maintaining employee satisfaction is crucial for organizations today, says Susan Kutar, a People Ops professional who has previously worked at Slack and GoTo Financial and has over 14 years of experience in Talent Acquisition & Human Resources.
Layoffs and cost-cutting: There was aggressive hiring for remote workers during the pandemic, however, the aftermath led to major layoffs, especially in the tech industry. With the recession came cost-cutting strategies that have negatively impacted employee salaries. The company's focus is on saving every penny to remain profitable, especially for new IPOs or those seeking investor funding. The VC funding has also become more reserved, affecting the company's dispensable amount for benefits, perks, and salaries.
Perks and benefits: The aftermath of the pandemic has caused a reduction in benefits and perks offered by companies, especially related to travel, events, conferences, and professional development benefits. Budgets for new tools and remote office setups are also being scrutinized. Slack changed their onboarding process, which no longer requires new hires to go to the SF headquarters, in an attempt to save money.
Reevaluate benefits and perks to ensure you're not eliminating the core components that contribute to a positive work environment. According to Susan Kutar, while considering cost-cutting measures, try to focus on expenses that have minimal impact on your employees, such as vending machines, cafeterias, and in-office perks like free coffee.
Certain employee benefits that can have a bigger impact on employee productivity like work-from-home options should be maintained. A careful assessment of the company culture and what truly matters most to the team should always be kept in mind.
“Ultimately, when the company is in a better financial position, it is important to give back to employees and reinstate some of the benefits that were temporarily adjusted during difficult times.” says Susan Kutar.
In the tech industry, prioritizing investments in technology is second nature. There are several different apps and tools out there, both paid and free, that can help in maximizing productivity for employees.
One effective long-term cost cutting strategy could be to continuously evaluate and assess the return on investment for these tools for their full utilization, said Susan Kutar. For example, if only a small percentage of employees use a certain project management tool, it might be time to explore alternatives within existing G Suite or Microsoft Office offerings. Referral bonuses are another perk that warrant reevaluation, as they make sense primarily during periods of active hiring.
Leaders and managers can have regular employee check-ins, whether on an individual or team basis. Use pulse surveys to understand employee sentiment. These insights can provide valuable perspectives and help in pin-pointing where they can improve while maintaining employee satisfaction.
Demonstrating empathy and understanding as leaders can also set a positive tone for the entire organization. If leaders can show that they are willing to make sacrifices, it can be easier to navigate through organizational changes along with the team. '
The current economic climate has understandably instilled job insecurity and the fear of job losses among employees. As HR professionals and leaders, it is their duty to address these concerns and provide reassurance to our team members in order to maintain a positive working environment.
Transparency and communication are the foundation of building a culture of trust and creating a positive work environment. When employees trust their leaders, they become more engaged, motivated, and committed to their roles. Building this trust involves making employees part of the decision-making process where possible and also explaining their rationales behind them. Acknowledging employees' broader understanding of the organization beyond their individual roles can also strengthen trust.
It is important to talk about how companies are affected during market downturns. It can lead to certain changes and sacrifices impacting both the company and the employees. Many companies add in new policies or changes without really explaining the reasoning behind them which can lead to employee resentment and a negative impact on brand reputation. It’s important to avoid sugar coating the current situation as that can keep employees in the dark and can lead to a loss in company trust.
“I believe that transparency and effective communication is key regarding cost-cutting initiatives that are always difficult yet crucial. It also helps in building trust with employees and reminds them that they are partners and stakeholders in the company.” says Susan Kutar.
When you explain the "why" employees are more likely to understand and be receptive to any new changes. An effective communication style can help employees grasp the situation and collaborate towards the company's improvement.
In conclusion, maintaining a positive company culture during an economic downturn is challenging, but with the right approach and a collective commitment from leaders and employees, it’s achievable and rewarding. By fostering open communication, being transparent about financial health, and building a culture of trust, we can help our employees to feel more secure and motivated, even amidst uncertainty.
Ultimately, considering options like re-adjusting perks and benefits before resorting to layoffs can create a more compassionate and supportive work environment. Empathy and transparency should be the guiding principles while we navigate through this uncertain time.
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