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Businesses cutting back have more options than they think

By Mary Lorenz on Jul 2, 2008 in Economy, Employee Attraction, Employee Retention

Yesterday, USA Today and CareerBuilder.com released a survey on staffing trends for Q3 2008. Among the findings from the nearly 3,000 hiring managers and HR professionals who participated, fewer companies plan to hire or give out raises this quarter (in comparison both to last quarter and to this time last year).

Certainly, this news isn’t surprising given the tremendous media attention on the slow economy and rising food and gas prices, but businesses beware: your instincts to cut back on staff, eliminate employee perks or reduce employment branding in efforts to reduce costs may cost you.

If you, like roughly 10 percent of the companies surveyed, anticipate layoffs in Q3, you might want to read about the hidden costs of layoffs first, and determine if decreasing staff are really the most economic solution.

Planning to cut benefits? That could also backfire, especially considering that 19 percent of workers are reportedly actively looking for jobs. Bnet’s worklife bloggers offer three “recession-friendly” ways to keep your workers happy, even when you’re forced to cut back on certain perks:

Give Gifts That Mean Something (like taking a cue from Fat Tire Brewing Company, who gives its employees bikes and encourages them to bike to work, thereby saving on gas and bettering their health).
When You Can’t Give Money, Give Time (no surprise here: offering flexible schedules and work-from-home options as an employee engagement tactic is increasingly common).
Make Incentives Memorable and Incremental (much like Harbor Court Hotel in San Francisco, which rewards employees incrementally with chips that can be redeemed later for gift cards).

Here are a few more ideas for low-cost employee perks.

Finally, if you’re part of the 24 percent of employers planning to add staff this quarter - or the 26 percent replacing lower-performing workers - you should use the recession as an opportunity to step up your employment branding, according to talent management expert Mike Nale. His recent Hawaii Reporter column asserts that advertising during a recession, when competitors are cutting back, can improve market share and return on investment at a lower cost than during good times.

What do you think? Is the above advice practical? How has the slow economy affected your company?