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Creating a Survival Plan for Tough Economic Times
Kimberly A. Nash, SPHRDirector of Human Resource Services
Alpha Benefits GroupApril 9, 2009
Overview of the Economy
• March National Unemployment Rate 8.5%– 5.1% in March 2008
• February PA Unemployment Rate 7.5%– 4.8% in February 2008
• February Local Unemployment Rate 7.2%– 4.3% in February 2008
The Effects on our Clients
28% report business results are the same this year
63% report decrease in business results this year
9% report increase in business results this year
The Effects on our Clients
Layoffs
31% laid off employees in 2008
69% did not layoff employees in 2008
37% laid off employees in Jan/Feb 2009
63% did not layoff employees in Jan/Feb 2009
Layoffs
16% expect future layoffs
44% do not expect future layoffs
40% are unsure about future layoffs
The Effects on our Clients
Assistance to Laid Off Workers
43% offered no assistance
22% extended health insurance benefits
19% provided severance packages
9% provided outplacement services
The Effects on our Clients
Cost Cutting Measures
Top 4 responses
41% eliminated overtime
39% will not be giving raises in 2009
33% involuntary layoffs
31% have not filled vacant positions
The Effects on our Clients
2009 New Hires
42% expect to hire employees in 2009
34% do not expect to hire employees in 2009
24% are unsure
The Effects on our Clients
Stimulus Impact:
10% report it will help their business
7% report it will hurt their business
20% report it will have no effect
63% unsure of its effect on business
The Effects on our Clients
Stimulus Impact:
Number of Employees in your organization
1% report they will be able to recall employees
3% report they will hire additional employees
3% report they will have to layoff employees
93% report they are unsure
The Effects on our Clients
Stimulus Impact:
COBRA Subsidy
32% report those who didn’t elect COBRA will elect it
13% report those who didn’t elect COBRA won’t elect it
25% report they don’t have any eligible employees
25% report they are unsure of the impact
5% report they do not offer COBRA
The Government Response
• CHIPRA• Bailouts• American Recovery & Reinvestment Act
– $787 Billion Program (estimate)– Workforce Investment $3,950,000,000– Employment for Seniors $120,000,000– State Reemployment $400,000,000– COBRA Subsidy
• 65% for eligible individuals– Unemployment
• $7,000,000,000 for incentive payments• $25 additional per week for claimants• $500,000,000 for states to administer UC
• How will they (WE) pay for it?
The Government Response
• President Obama’s Blueprint for Change– Pay Equity – Lilly Ledbetter– Support American Labor
• Pave the way for union only on federal work• Employee Free Choice Act• Protect striking workers from being replaced
– Increase Minimum Wage– Require employers to give 7 sick days – Expand FMLA
• Employers with 25 or more employees• Paid Leave• Cover elder care, school events, domestic violence
– Flexible work schedules• Encourage telecommuting
Create a Plan• Cutting Costs? Think about:
– The long-term effects– Taking care of your customers/clients– Keeping your brand healthy– Can our employees do more with less?– Will we be more competitive when the
economy rebounds?
Layoffs• Identify who will be affected
– Discrimination/wrongful termination suits– Employees on FMLA– Train Management!
• Benefit Continuation– Final Paycheck– Vacation, PTO– COBRA
• Severance Agreements– If giving severance, have a signed agreement
• Outplacement Services
How to Survive• Be candid/honest• Show you care• Tell employees what is expected• Give employees the necessary tools• Give employees opportunities to do what
they do best• Encourage development• Remember to recognize and praise• Provide stability
YOU ARE NOT ALONE