Webinar Q & A – Human Capital Management in a Tough Economy: Ways to Cut Employment Costs
Compensation Questions, Answers and Ideas from our Webinar on Human Capital Management
The following is a transcript of the discussion that followed PayScale’s webinar, Human Capital: What is a Manager’s Role in Managing Human Capital? The main topics covered in this discussion focus on how cost-cutting programs have been implemented to benefit both employer and employee. Questions, comments and answers are provided by individuals that participated in this webinar, as well as PayScale’s webinar leader and director of customer service and education, Stacey Carroll, M.B.A., SPHR. Stacey Carroll is listed by her initials, SC, and participants are listed either by name or number.
Participant 1: I’ve heard a lot of employers are cutting their contribution to 401K plans, which would be any kind of voluntary investment plan for Canadian businesses. Has anyone instituted this yet and how is it going?
SC: There are two different points here. The first being if your organization is looking at cutting the matching contributions, if any, to the 401K plan. And, the second would be whether your employees are making cuts to their 401K plans. And again, having been a person who spent a lot of time in retirement planning and employee benefits as an area of focus within HR, I think now is not the time to be cutting our employer contributions. Employees still need to keep a long-term focus. They also need to balance that with short-term cash necessities. It certainly is an opportunity for us to re-look at our HR policies on how often employees can change those 401K contributions and if, in the past, we’ve had more restrictive rules around how often people can change their contributions. It may be time to look at allowing some more flexibility there.
Participant 2: We have started an employee education program. It’s called a Knowledge Leader Program. We have trained one person in accounting on Excel. She did a number of sessions for those who are interested in learning about it and continues to help on a one-on-one basis.
SC: I think that’s fantastic – the employee development opportunity is there for her, as well as for folks getting skills in Excel.
Here’s another suggestion. One of the workforce reduction choices is an unpaid educational leave of absence, which is sort of an interesting idea that provides an opportunity for employees who have maybe been thinking about it, and wanting an opportunity to just say, “Okay, I’m going to take this leave at this time because it will help the organization and also give me an opportunity to do what I’ve been wanting to do.”
Participant 3: How do we reward or acknowledge the backfill person?
SC: I think that’s a tough one. I don’t know if you’re bringing in a new employee or just giving the work to other folks. But I think that there needs to be some acknowledgment of whether that employee should be paid at a different rate, or maybe there’s some over-time involved. Certainly, the ultimate idea here is HR cost-savings, so you need to do it in a way that is cost-effective. I think that there can be ways, both monetary and non-monetary, to acknowledge that person that’s assuming that extra work.
Lindsay: I wanted to mention that one of the important things people look at is managing liabilities. One of the programs we’ve implemented is workplace safety rewards – they’re monetary, small, $500 – that we give out if employees can come up with a workplace program that is a safer way for us to do business. We are in the construction industry. And, we have found that the couple of thousand dollars that we spend a year probably is saving us thousands upon thousands in work place injuries. It’s one of those things you talk about, and it seems counter-intuitive, but in the long run we think that we have prevented quite a few accidents by doing this. And it gets employees involved. And, it’s positive when employees can help you.
Brandi: Regarding compensation and performance management, our organization has recently undertaken a job description project where we have identified employee salary ranges in an effort to control overpayment and underpayments against the market rates. That helped us decide to cease our cost of living raise for every employee and now we are instituting a pay-for-performance plan that we hope will save the organization several thousands of dollars each year.
Yolanda: I wanted to share one thing I’ve been involved in helping clients do in our current economy. Let’s take advantage of employee reimbursement programs offered through the state. Make it so your new hires receive job training from you that provides them with field-building training and that is reimbursed anywhere from 50 percent up to 100 percent.
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