Cut them hours, it is survival time

Ever since the beginning of the financial downturn we have seen organizations of all sizes determined to solve the economic effects of the downturn by cutting headcount. In the process improvement efforts many organizations believe that the way to improve the organization is to cut headcount. The we add to this the misguided vie that the way to ensure the sustainability of the organization as the Affordable Care Act requirements kick in is to cut hours so they can avoid the mandate to provide medical coverage for their employees. So let me ask you to really think about the following questions and consider the implications of your responses.

·         Is your organization ready to close the doors?

·         Are you prepared to dilute your organizational knowledge base?

·         Can you truly meet the needs of your customers with fewer employees?

·         Are you still as innovative as you were before the reduction in force?

Despite the gloom and doom projections there are some organizations that truly understand the role of the human capital assets within your organization. Cumberland Farms has just announced that they will ensure that all their employees are working 30 hours a week and are getting health insurance. Costco, who provides health benefits AND a higher than average wage (in an article yesterday which talked about a living wage bill going through the District government stated the average Costco wage is $21.65 per hour) have seen sales income grow despite the added expense. In an article from Forbes on April 17, 2013 (http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/) Costco is reporting an eight percent growth in year on year sales. Look at the other side of the coin at Wal-Mart. The same article states in the same time period Wal-Mart saw sales climb 1.2%. Wonder why?

Let’s talk strategy here for a moment since that is what we do. You are in a senior management role and your primary goal is to ensure that your organization is still in business way after you have departed. So how are you going to achieve that? You are going to achieve that by ensuring that the organization is being proactive in being innovative with new services and products. You are going to do that by having human capital assets that are happy and engaged. You are doing that by having human capital assets that can’t wait to enter your portals each and every day.  You achieve this by becoming the employer of choice in your community and industry.  

In light of these data points, return to the questions above and see if your answers correspond to our thoughts. We first asked you whether your organization is ready to close its doors. So let me ask it in a slightly different aspect. Have your organization in the past 60 days begun the process to tell your customers that you are going to file Chapter 7 under the Bankruptcy laws, if not you are not ready to close the doors. Second we asked you if you were ready to dilute the knowledge base. We are not in your father’s world. We compensate our human capital assets based on what is in their heads, not what they produce. So, if you reduce hours or headcount those knowledge points leave your organization making it less agile to innovate.

Before you cut them hours be absolutely sure you know the complete impact on your organization. Make sure that you can remain innovative and ahead of the competition.

Are you walking the walk and talking the talk when it comes to organizational change. Want to find out more about how to introduce an authentic change environment? Join us in in Orlando Sept 25 for a look out how to bring about change in your organizations. For more information visit http://achievinghrexcellence.eventbrite.com. Deadline for registration is August 20^th.