A recent Fortune Magazine featured six companies that avoided the pinch of layoffs during the economic downturn. As of mid-January 2010, they have never had a layoff. SAS, Wegmans Food Markets, Mercedes Benz, S.C Johnson & Sons, EOG Resources and Baptist Health South Florida were among the companies highlighted.
All companies had a mix of attributes. According to Fortune Magazine, "S.C. Johnson & Sons, a family-owned and operated household cleansing products manufacturer, has been able to avoid layoffs for 124 years. Even in the worst of times, management has stuck to the belief that company employees are its most valuable asset." And Mercedes Benz ‘s management looked inward to take a decisive step in this economic climate. – “When management discovered that further cost reductions were unavoidable, the CEO and executive team (28 people total) accepted pay cuts. The tough choices paid off, resulting in a 10% total reduction of labor costs from mid-2009 to year-end. “
All companies made tough choices in these rough economic times and still they put their people first, and by doing so were able to maintain their employee base while growing loyalty.
Let's take a deeper look at what was their "secret sauce" to no layoffs:
-Instituting hiring freezes in all areas except R&D and sales
-Cut back on travel and expenses and rely more on conference calls and video conferencing (almost all)
-Engage company support by communicating early and often
-Give developmental opportunities to advance career
-Cross train staff for different jobs making them flexible to the changing needs of the business
-Reducing temporary staff, placing controls on overtime
-CEO and executive team take pay cuts
-Take a long-term perspective on hiring, e.g. delayed merit increases for six months
-Run the organization on low cost and low debt
-Adhere to compensation plans and continued to pay bonuses, award merit increases, promote from within and issue stock grants.
If you have not heard of the companies cited above, maybe it's time to take a page out of their playbook. And keep in mind as one employee at Wegmans said, "Our thought process is that we'll never have a layoff. Everything is planned on the basis that our people come first."
By putting people first, companies can be innovative, creative and ahead of the competition and not only survive, hopefully thrive in these economic times.
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