Involve employees in cost cutting to build team spirit, says David Maida
KEY POINTS:
Many organisations are putting a freeze on hiring new staff and are being very careful on how they're spending money on the employees they already have, says Stephen Powell, Auckland general manager for Momentum.
"We've just met with one organisation that is registering the amount that they're spending on Christmas presents on staff and that sort of thing," Powell says.
But Scrooge isn't just for Christmas. The screws are being tightened all round. From company cars to colour copiers, organisations are looking to save money.
"There is also the sustainability movement where you're seeing a big push in a lot of organisations to be very careful with the paper that they use. Print double sided and really set strong goals for the reduction of paper usage and waste control."
The company car was once commonplace but is now reserved for an elite few.
But Powell says it's not all slash and burn. Some companies still see the value in wellbeing programmes for their employees, such as gym memberships.
"This is with the recognition that they can cut time off through illnesses and over the long-term improve employee wellbeing and satisfaction at the same time."
Company social events are probably the number one employee perk to get the sack.
"You're seeing a general drive in terms of entertainment, perhaps reducing entertainment or cutting back some of those expenses."
Powell says managers are also scrutinising the benefits of client-based entertainment.
"The number of get-togethers, and certainly the number of offsite training or team-building sessions, is being looked at and in some areas cut back."
But when it comes to cutting training for staff, Monique Visser, managing director of PAGE (Providing Advice for Great Employers) questions the logic.
"The most common argument I hear around training is, 'What if I train them and they leave?' And my answer is, 'What if you don't train them and they stay?'"
Some training can be done online or in larger groups to cut per-unit costs. But the cost cutting in some organisations borders on the bizarre.
"A manager actually cut off a senior manager's petrol card. They actually cut it off without telling him. They went to use it and it didn't work.
"It took about three days for them to get an answer ... What apparently happened was they had seen some charges on the card that they didn't understand."
But when employers start getting cheap with their employees they often do more harm than good, she says.
In these economic conditions, nitpicky managing and accounting can really burn a relationship with an employee. And generally it's not just the one employee who feels the negativity.
"One of the most dangerous things about treating an individual like that is that they will tell someone else in the organisation. Treating one person badly really makes some terrible inroads into morale."
And morale is hard enough to keep up in these tough economic times.
"When times are tough and as a business, you need to be on your game, it's the willingness and the attitude of your team that's going to get you through and make you stand out against your competition," Visser says.
When margins are tight, organisations are looking to make the most of every employee.
But Visser suggests avoiding the kneejerk reaction to micromanage staff.
"Micromanaging the little things to the point where managers are becoming a little out of control - like taking an hour for lunch instead of 45 minutes and other clock-watching kind of things - has become a bit of a theme."
Visser says micromanaging is more than likely going to backfire.
"With productivity costs overall, where you've saved your 15 minutes, you've probably lost a half-hour a day in attitude-driven productivity."
Rather than micromanaging around what people aren't doing properly, Visser says you should be working to maximise the discretionary effort which employees put in every day.
Whether it's making a company drop-off at the bank during lunchtime or staying 15 minutes late finishing up a project, Visser says gratitude goes a long way.
"It's just the recognition of someone putting in some effort. One of the things we all understand as parents is to reward the behaviour you want repeated.
"It's absolutely no different with a team," Visser says.
But whether it's the use of colour copies or clock-watching, Visser says bigger companies are more likely to tighten the screws on their staff under tough economic conditions.
With head office down country, it's easier to make someone's life more difficult if you don't have to look them in the eye.
"It's the larger companies who can get away with it. The smaller companies that have a more intimate relationship with their team, you're probably less likely to see that type of behaviour.
"The more you can distance yourself and take out the human factor when you're making those tough decisions, the easier it is."
Most workers would probably understand if the annual company party is not the lavish blowout it might have been in years past, but if companies start becoming too onerous with employees, Visser says to reconsider.
"People have an innate sense of justice and fairness and if they feel that's out of balance they will behave in a way that brings that back into balance for them. An example I've seen in the past is when someone didn't get a pay rise, they started taking home quite a bit of stock," Visser says.
But Visser also says to spare a thought for the person charged with making the budget work under the strain of today's economic conditions.
"Contrary to popular belief, managers are people too and they're feeling the pressure as well from their bosses on managing costs. But just because they're feeling the pressure that doesn't always mean that that pressure is being manifested in a positive way to their team."
Most managers in New Zealand are probably there because they were good workers at some stage, Visser says.
"There are a lot of managers in New Zealand who could do with some good leadership training. At the end of the day, you're going to have to make some unpopular decisions in tough times. That's life. That's what being a manager is all about - sometimes you have to be unpopular," Visser says.
One way of making cutbacks less unpopular with your team is to involve staff in the decision making or at least the consulting process.
"People know we're in tough economic times. They don't expect us to be spending a fortune. I think that one of the biggest mistakes that we make is we don't give our employees enough credit for wanting to be involved in the survival process that we're all in at the moment."
If a manager simply decides the lease on the fancy cappuccino machine in the break room is just too expensive and has it removed without notice, of course they will be unpopular.
"If things are that bad that you needed to cut the coffee machine out and it really was going to make a difference to the failure or success of the business, I'd be having conversations with my team and saying, 'Guys, let's brainstorm on some cost cutting'."
Visser says the team might very well suggest that the coffee machine has to go but feel better if the decision comes from them.
"People want their employers and their companies to do well. It gives them job security. I'm amazed at the willingness of team members to contribute to the success of a business if given the opportunity to do so in an open, value-based environment."
