Now that 2009 is nearly over, we thought we’d speak to area HR professionals for a look back on a tumultuous year, and a look ahead into 2010. All year long, HR managers everywhere were at the forefront of employee layoffs, counseling and government regulation. Are they happy to see the year end? Or dreading 2010?
IB asked four Madison, Wis.-area executives to share their thoughts and experiences. Jillian Adams, the HR Manager at TomoTherapy, Inc.(TTI) offers her perspective from an employer’s point of view; Londa Dewey is the President of the QTI Group (QTI), Dane County’s largest, privately owned human resources and staffing organization; Angie Heim is president of The Employer Group, a professional employer organization (PEO) providing small to medium-sized businesses with employee benefits and human resource consulting, among other services; and David Furlan is the Operations Manager for Cottingham & Butler Consulting Services (C&B), professional insurance advisors and providers of employee benefit and risk management services. Furlan is also president-elect of the Greater Madison Area Society for Human Resource Management group (GMA SHRM).
IB: 2009 is coming to a close. From a human resources standpoint, how would you characterize the past year?
Jillian Adams (TTI): This past year has been extremely challenging. Facing multiple reductions in force, we’ve lost good talent and have had to ask our remaining team members to continue to do more with less. All the while, our mission has been to retain our existing employee base, put programs in place to ensure our key talent isn’t looking, and also work to ensure our employees are engaged in the business. Right now is when we need employees to be engaged the most, and during these tough times, it’s usually the time where employees have no desire to be engaged in the workplace.
Londa Dewey (QTI): 2009 was a challenging year, but I believe that within every challenge is an imbedded opportunity. To me, the opportunity is to take a step back and determine how your organization can emerge stronger, better, and more valuable to your customers as the economy recovers. At QTI, our motto this year was to be “realistic, opportunistic, and to prepare for growth.”
David Furlan (C&B): I would characterize 2009 as an extremely challenging year. Employers had to deal with new federal legislation, such as the COBRA subsidy for health insurance premiums, as well as comply with current legislation due to circumstances caused by the recession. [With the latter], many employers were dealing with legislation they’d never encountered before, such as laws related to layoffs and furloughs.
Most companies are dealing with extremely tight budgets with no increases in salary, and often benefits cuts. HR professionals have had to rise to the challenge of keeping up morale and rewarding performance where there is little to no money for any type of incentive or bonus program. While the job market is dim, top talent may stay with an employer right now even though they are unhappy with their position. HR recognizes there is a great risk of losing these employees once the job market turns around. So their challenge this year has been to stay focused on these top employees and perhaps find unconventional ways to reward their performance.
Angie Heim (TEG): There was a little good, a little bad, and a lot of unknown. The hiring pool is fantastic! This made our job a little easier when clients were hiring and we hired for ourselves. Layoffs had an impact all year. We had a few clients cut their workforce in half and a lot of clients cut one or two jobs or did not rehire if an employee left. The Employer Group did a lot of hand-holding and counseling to laid-off employees scared and concerned for their future. In years past, if a client laid-off an employee, we usually didn’t hear much — jobs were out there, and employees moved on. [Not so, this year.]
The media has been tough on HR this year, and a good example is H1N1. Employers were often so scared that they felt they had to come up with a new plan of attack for when someone was sick, even going so far as to change policies or the PTO plan itself. And health care reform is such an unknown. An HR professional could read periodicals all day and still not have a clear picture of what the government is trying to achieve. Employees and employers, I think, more than ever, relied on HR departments and staff to help smooth the fear, concerns, and unknowns. These were items that didn’t exist just a few short years ago.
IB: I can hear a lot of challenges in your answers. Others? And what went well?
Adams (TTI): Keeping our employees engaged and helping them realize that if they are, they can directly impact how we, as a business, recover. Employees have a tendency to hunker down, go into maintenance mode, and don’t want to call attention to themselves for fear they will be the next to go. Some are just biding their time until the market picks up and they can leave. We’ve done amazingly well this year with retention despite all of these issues maintaining a regrettable turnover rate below 6%. However, it has not been easy, and I’m not sure we’ve seen the worst of it yet.
Furlan (C&B): As it relates specifically to employee benefits, we have observed the following: First, HR professionals continue to wear two hats when it comes to their employee benefit plans, as a member of the firm’s executive/management team, and as an advocate for the firm’s employees. They see how the employees have been impacted by the recession (possibly no wage increase, or decrease, or spouse who has lost a job), and understand how difficult it will be for employees to handle any additional costs for their benefit plans. Wearing the two hats makes the decisions they need to make all the more difficult, whether they are changes in benefit philosophy, plan design, or employer contributions to benefit plans.
Also, Government regulations have continued to complicate [HR Managers’] lives. Some of the more cumbersome to deal with since 1/1/09 are the ARRA COBRA Subsidy; Mental Health Parity; and Wisconsin’s change in the dependent age. These have required an understanding of what each means, communicating those changes to employees, and possibly establishing or changing processes.
Finally, the uncertainty of Federal Health Care Reform makes their lives difficult: What will it look like? Who will be affected? When will it be implemented? How will the decisions they make today be impacted?
Heim (TEG): The government-provided COBRA subsidy was a nightmare! From the start, the guidelines released by the government were unclear. Administratively, our company spent a long time making sure new COBRA letters were sent to all employees of all clients who were terminated within the time frame the government stated. The eligibility went back a number of months, so not only was the COBRA subsidy a plan for going forward, but we had to go back and re-send COBRA paperwork to eligible terminated employees.
In some cases, either the clients, or The Employer Group, was responsible for claiming the subsidy credit, and in other cases, the health carrier was responsible. Just recently, we received new guidelines (the COBRA subsidy ended 12/1/09) that contradict the final eligible date. Again, employers and employees turned to HR this past year for information that HR departments either just couldn’t answer, or were scrambling to find a good answer.
A positive this year was training. Many clients of The Employer Group requested extra training, from soft skills to new policy development and implementation. Clienst/employers are looking to invest in the staff they have. It’s been tough this year, and employers want to make sure that they have committed employees to [weather the storm with]. HR departments love training and policy development. This was a good break from the counseling that went on most of the year.
Dewey (QTI): Overall, I think the biggest HR challenge in 2009 for our company and others was the need to clearly communicate how the economy is affecting our business. Our top initiative for the year was to adapt our capabilities to our client needs in this environment.
During 2009, QTI conducted triple the number of compensation surveys than in a normal year. Each survey revealed new information on how businesses were changing compensation strategies to preserve cash while recognizing their most important asset, their people. As the year progressed, employee engagement became a bigger concern as employees have become weary of cost cutting measures and reduced training and development opportunities.
IB: Finally, how are you approaching 2010? With optimism? Pessimism? Or will it be more of the same?
Adams (TTI): [HR managers] must be optimistic as the employees need to know they believe in their businesses. At TomoTherapy, the approaching year and all of the challenges it will bring with it has forced us to become more disciplined in what and how many projects we take on. We’ve more strictly outlined our HR department goals to ensure we are only focusing on retention, employee process improvement and compliance in the next year. In 2010, we will be all about the employees — making it easier for them to be involved, get engaged in the business, and ensure we are streamlined in everything we do.
Furlan (C&B): The good news, as we head into 2010, is that employers have learned to manage their business with fewer resources and have made the difficult decisions related to layoffs and furloughs. As a result, many organizations are more efficient than before and in a position to be more profitable as business picks up.
For HR professionals, this is an exciting time. It provides the opportunity to re-build an organization in a better way. I anticipate HR to be more involved than ever in long-term planning. As hiring picks up, HR will be looking for individuals who are adaptable to different roles in the organization. This doesn’t mean that candidates have to walk into the door with extensive knowledge and experience. Instead, HR is seeking the type of person for whom company training programs will develop an employee who can fulfill many responsibilities within the company. It’s not necessarily doing more with less. It’s applying the efficiency lesson learned from the recession to build a healthier, more sustainable business with a smarter workforce.
Heim (TEG): There are cycles in everything; we just happen to be in a scary cycle right now. If employees and employers go back to the basics, I think everyone will be okay. That means, invest in your HR department, have good policies, and offer training and soft benefits. We might just [become] an employment environment where employees stay with an organization for 10 or 15 years, rather than today’s average of only three years.
Dewey (QTI): We are approaching 2010 with optimism. The pulse in the labor market has recently shown a positive up-tick in many industries, particularly our manufacturing customers. In addition, we are better positioned to serve our customers’ needs in the areas of staffing, high-level recruiting, compensation and employee engagement consulting, and HR-outsourced services such as payroll, benefits and HR support. We are ready and excited for the New Year!
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