Here is a snippet from the Harvard Business Online February 26, 2009:
In response to the global credit crisis, many financial institutions are making drastic cuts.
- 90% are cutting discretionary spending;
- 78% are reducing travel and entertainment;
- 61% are putting capital projects on hold; and
- 59% are performing layoffs.
Will these cuts make a difference in the long term? A Corporate Executive Board study found that only 11% of companies were able to sustain cost reductions after three years.
When I read this, here are some of my employee engagement questions:
- How much does this cut into employee engagement?
- Can we expect discretionary effort when we cut discretionary spending?
- Do we expect our employees to go anywhere when we reduce travel?
- When we are laying off, should we expect those left behind to start laying off of work?
You raise some important employee engagement questions that put HR in a bind. My guess is that HR in the trenches see this more than does upper management. We shall see what the future holds.
Landis:
I would agree. The Harvard stat. suggests that the cuts won’t last…I am worried that the wounds will.
David
Cuts, cuts, cuts are they being planned properly.
I agree an ill taste will be left in some employees’ mouths.
In our sister company we offer HR solutions and we are apporaching companies who are in serious trouble and offering them an alternative solution that is better than the one they currently operate and for half the price. We are not saying this because we are selling a system, these are facts from other users.
In most cases the response that we get from the HR departments is – we are happy with what we have.
A) Are they too busy to save money,
B) Are they lazy or
C) iIt’s not their money.
Is this a case of the left hand not knowing what the right hand is doing. I know if this was my HR department, they would be gone for wasting money when we could have saved another job !