The State of the Union

President Obama's State of the Union address served as a poignant reminder of the myriad of changes the country hopes to make as we move toward economic recovery. One of his more interesting themes was the spirit of innovation and reinvention amongst Americans and American businesses. Using the example of the Allen brothers' roofing company, a small business that, prior to being innovative, suffered when its factory went unused during the recession, the President showed just how well innovation and reinvention (change!) can help a business, (government) to survive and succeed a recession. "Fix what needs fixing" to move forward, because the country "can't win the future with a government of the past."

The same principles of innovation and reinvention should be applied to companies of all sizes in all industries throughout the U.S., not merely small, family-owned businesses. Many, many organizations laid off huge numbers of employees under severance programs and processes designed for a workforce of the past, knowing all the while these programs were costing billions of dollars. At the same time, other organizations choose to approach employee separations utilizing benefit programs with innovative, forward-looking principles, such as a Supplemental Unemployment Benefit Plan, a type of separation benefit plan aligned with a more modern workforce. These organizations saved real cost while still providing benefits to support those put out of work due to the recession. They took what wasn't working, changed it, and made it through the recession with a little less severance spend on their balance sheets.

Make changes to move forward into the future. In recent decades, this concept has affected most classes of benefits offered to most workers throughout the country. Why are the severance trends stuck in the past? Companies, like the government, cannot win with policies of the past. Companies should accept the trends of the recession - that money must be saved, benefits must meet actual needs of the employee, and innovative approaches must be taken while working toward the future - and reexamine old-fashioned and ineffective severance plans.

Workforce Strategizing for 2011

As the economy remains in the gutter, business leaders must ask themselves how to approach workforce management in 2011. Huge layoffs in past years have left companies with skeleton crews, and temporary staff recruited to assist over-taxed employees give businesses the advantage of not having to pay costly benefits. Is this the best approach to staff management in the new year? Are there more advantageous Human Resource strategies companies can adopt to effectively keep costs down yet keep workers happy and sane?

Temporary staff and skeleton crews may, and have actually proven to be, effective in the short-term where costs are involved. But as a long-term strategy? Probably not. A strategy should give a company a significant market advantage, and components of a successful strategy are typically those ideas which have proven to be successful over time.

In the past sixty years, the unemployment rate in the United States has only two other times (briefly in 1975; for a duration from early 1982 to mid-1983) reached above 9.0% (U.S. Bureau of Labor Statistics, January, 2011). During neither of these two times, however, did the utilization of temporary staff reach the proportions of that [seen] throughout the workforce now. As reported by the Bureau of Labor Statistics, employment in temporary help services continue to trend up as temporary help positions have increased by 500,000 since September of 2009.

A strategy such as this is nothing the workforce has ever seen before. Can it prove to be timeless and successful or will it fail companies over the long-term? Companies with workforce management solutions, such as offering quality benefits to full-time employees, tend to be more successful in distressed financial times when employees are more engaged. A better 2011 strategy may be to re-hire some of those positions and guarantee benefits, including separation benefits, which will, over time, cost a company less.

Adopting a strategy to gain a competitive advantage by keeping employees happy might, during these still distressed times, provide a business with that necessary competitive edge. A balanced benefits package can do much to keep employees fully engaged. Rather than a guilt-driven and expensive severance package, the adoption of a Supplemental Unemployment Benefit Plan - a plan which enables a company to provide appreciated separation benefits while still delivering significant short- and long-term savings - can be a component of an attractive benefits package. An employee who knows he will be taken care of while employed and in the case of a reduction in force will likely still be willing to fight for a company's success.