September 2009: Feature Story

And the Ship Sails On
Staying Afloat in Troubled Waters with Worker Management and Retention
By Jason Morgan

Crashing over the bow, violent economic waves wash away resources and valuable plunder. As the ship rocks in the wake of the market turmoil, your crew struggles to keep solid footing. You are expected to steer your vessel through rough waters as the captain of your construction company. Though keeping a lookout in the crow’s nest for jobs on the horizon is important, proper crew management is crucial in a time when employees are being lost and it feels like the ship could sink at any moment.

“The No. 1 concern is you don’t want to lose the best workers,” says Tom Kruglinksi, Senior Consultant at Retensa, an employee retention services firm based in New York City. “You want to make sure that you retain those folks. So the problem is that when people start leaving, especially during layoffs, others get frightened. You don’t want that big job to come along and not have the right people to do it. There’s always going to be some demand for employees out there, and you don’t want your best people jumping ship and going to another organization.”

Honest and open communication with employees will be your strongest sails. Of course, you want to make sure that you communicate compassion and understanding, but you also want to try to give your crew as much information as possible. The worst thing that can happen, according to Kruglinski, is people feeling as if they are in a vacuum of information. People tend to fill that vacuum with the very worst outcomes.

Communicating with a positive spin can be difficult when you’re the one looking at the books, but it’s important to keep your crews happy. They are the ones that will help you weather the storm. So before anyone walks the plank or earns a place in Davy Jones’ locker, ask your crew for their ideas and input.

“I’ve been a consultant now for about 24 years and I’ve never had a situation where you can walk into a workplace and not get a lot of good employee ideas on where to cut costs,” says Kruglinski. “You can go to the employees and say, ‘I am trying to make ends meet here to avoid layoffs, can you think of any places where we might be able to cut some corners?’”

If you can’t pay the bills, then you have to make the tough decisions. You have to trim. Retensa argues that a company would be better off in the long-term if cutting workers is the last resort. Unfortunately for some, it’s the first. Before any unnecessary layoffs, the company should weigh its options and chart its best course through the
erratic economic surf.

O’ Captain, My Captain

No captain wants to go down with the ship, because no captain wants the ship to go down. To keep your company seaworthy, you need to give your crew four important things.

“There was an interesting article in Harvard Business Review [June 2009] by Robert I. Sutton called ‘How to be a Good Boss in a Bad Economy,’” says Kruglinski. “He talks about the importance of four things that people need in hard times — No. 1 is predictability, No. 2 is understanding, No. 3 is control and No. 4 is compassion.

Trim too much to save and you could end up with not enough workers or ones that lack the skills you need. If it does come to layoffs, make sure you retain the workers that have the right mix of skills to get the job done.

“If you’re in a tough situation, you might not be able to give employees so much control, but you can give them predictability. The bottom line is to give them as much information as you can about the state of the business. If you see the possibility of layoffs down the road, it’s better to give people a heads up,” he continues. “That way they have the ability to get their lives into some order before a layoff happens.”

Aside from layoffs, voluntary buyouts are a popular option. Another cost-saving, layoff-avoiding trend is rolling layoffs. Typically everyone takes a set amount of time off — say a day or two a month — without pay to save the needed amount of money. But you can’t go cost-saving crazy with this method because it hits the people who have the lowest paychecks the hardest, says Kruglinski.

The reality is that you might have to lay employees off, but who? Do you let go of a senior employee, whose productivity has gone down in the past couple years, or a young gun, who doesn’t yet have the skills that you need? The truth is you can’t single out just one group to solve your problem. Every organization requires a good mix of skills to get the work done. You want to ensure that you retain the best performers.

Sometimes the most senior people with higher wages provide the best value, other times, they don’t. You have to be careful in any situation that you don’t discriminate against any category of employee. The senior people who are more costly often happen to be the oldest workers and they’re protected by law. A company could get into some legal trouble if they target those folks. If you do need to restructure, take a good look at what skills you need now, what skills you’ll need in the next three to five years and who you have on hand that has those skills.

“Employers may say, ‘Here’s the situation. This is the way it was last year and this is the way it is this year. We can see the problem and the need for cutbacks,’” Kruglinski explains. “The reality is that people will appreciate it. You aren’t alienating the people you’re laying off, so when the downturn does come to an end, you will be a more attractive employer to those you may need to hire back.”

In general, and this is true whether it’s good times or bad, you err on the side of sharing more information with your employees, and that will serve you well as a businessman in the long term.

There’s one important ingredient that must not be overlooked — compassion. Sometimes when there are layoffs, the manager will try to get it over with as soon as possible, making the delivery terse and quick. But you have to realize that people take some time to absorb information. You might know it for weeks or a month coming down the line, but they are hearing about it for the first time.

“You need to give the time an employee needs,” Kruglinski recommends. “If he or she is having an emotional reaction, you need to go with the flow. Don’t get upset and toss the person out of your office. Realize that what they are going through is a stage of grief.

“When you lose your job, it’s natural to have an emotional reaction. You want to make sure that they have all the information they need regarding COBRA Health benefits, severance issues, things they need to do — cleaning out lockers, returning tools — and also as you communicate how they do it, you have to be as compassionate as possible. It’s an awful task and for those of us in HR, who got into it because we like people, we can sometimes rush through it and not do a good job. It’s not good for the employee and it’s not good for the organization. You may want to hire that person back, and depending on how you deal with the separation, that person might not want to come back.”

All Hands on Deck

Before the steady breeze gave way to a jobs doldrum, there was a focus on the potential shortage of highly skilled workers. It’s estimated that 1 million new construction workers will be needed by 2012 and there will be 2.4 million skilled production jobs — machinists, machine assemblers, operators and technicians — available, according to the Department of Labor. Despite recent economic factors, that dark cloud still looms.

From the worker who can run a complex motor grader to the mechanic that works on it, there will be a shortage of workers to fill 2.4 million skilled production jobs by 2012, analysts say.

“Although many companies have been forced to make the painful decision of laying off employees, all companies will face this same workforce issue by 2012,” says David Bannister, Workforce Development Manager for the Association of Equipment Manufacturers (AEM). “For example, the employees who were laid off during these difficult times might have retrained themselves for a different skill set or different industry all together. And, we have an aging workforce. When hiring levels increase, it will be even harder to find workers for these already-difficult-to-fill positions because the pool of candidates has shrunk.”

If the tide hasn’t turned your way as an employee, now is a great time to tackle new tasks. It’s always a good idea to learn a new skill that may have a huge effect on your career. Look into specific training and other experiences with which you can build your résumé. These days, résumés are a dime a dozen, so it’s a good idea to keep yours up to date.

Sitting in front of a computer screen firing e-mail résumés to employers might feel counter-intuitive. In the construction field, the more you can network the better. While you might be able to find some connections on career-focused Web sites like CareerBuilder.com or networking-focused ones like the ever-popular Facebook, nothing is better than going out and meeting people face to face. Getting involved in the local construction community through organizations like NUCA is a great way to meet new people in the industry and circulate your name and skills.

“What employers value most often, aside from high skills and being able to do the job, is a positive attitude,” says Kruglinski. “People who have that positive attitude and a sense of team work would be very hard to get rid of. The reverse is true as well. So if someone is negative, overly critical, unwilling to take on new tasks or inflexible, that weakens his/her position in the organization. It’s important to stay positive. Even then it can be a self-fulfilling prophecy.”

Monitor the wind decks! All hands! Main sheet line, starboard! Hoist the main sail! The economic sea has calmed and the winds of work are steady. It’s time to set sail to new productive lands of opportunity. Luckily, you manage your crew as well as you plot your company’s course. Deck hands are aplenty, and you’re happy to share the new wealth with those stalwart men and women who helped you weather the storm.

Jason Morgan is Associate Editor of Utility Contractor.