FinanceRegs.com » Surprising risk hidden in the downturn

Surprising risk hidden in the downturn

January 16, 2009 by Carol Katarsky
Posted in: Best practices, Communication, Fringe benefits, Hiring & training staff, In this week's e-newsletter, Latest news & views

We all know that most companies are in a bit of a slump. But the biggest risk your company faces may not be financial. Experts say that during these temporary downturns, companies understandably cut back by limiting perks, getting stingier with raises and any number of other cost-cutting strategies.

Makes sense. But if companies cut back on employee raises, benefits and perks too much, it does more harm than good. The short-term boost to the firm’s wallet can be more than offset by sending valued employees running for the escape hatch.

The best performers in any department expect to be rewarded — or at minimum, not punished — so they’re particularly sensitive to any cutbacks. And because they are so good at their jobs, they usually can find other positions even when the job market is grim for the average employee.

If cuts are being mandated from higher up, there may not be much you can do to protect your own department (or yourself) from the fallout. But you can minimize the damage by doing what you can verbally or otherwise to make sure your best workers know just how valued they are.

If you play it right, they just might be around a few months from now when things pick up.

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