Lori Johnson, chief human resources officer at Bryan Cave, a St. Louis-based law firm with 1,800 employees, says she has been busy fielding calls from staffers concerned that the firm’s cost-cutting measures may put their jobs in jeopardy.
“Some employees want to know why we are cutting expenses here and there,” she said. “I just keep telling them that in our 135 years we have never had a layoff, and it’s because we are careful with our expenses.”
A poll last month of 711 adults by Raleigh, North Carolina, benefits company Workplace Options showed that half of those surveyed reported feeling stress over financial matters, with 48 percent saying the current economic uncertainty has caused them to be less productive at work.
The financial problems of Wall Street have infected the lives of workers elsewhere, causing concern for some employers about the stability of their workforces.
Erin Pickens, benefits manager at RaceTrac Petroleum Inc., an Atlanta-based gasoline retailer, says she has seen the number of employees facing court-ordered wage garnishments grow by “leaps and bounds.” Of her 4,500 employees, most of whom are low-wage earners, the number of workers in serious debt has increased from 120 to 240 in the past year. She says workers have quit so they could cash out their 401(k) accounts.
“No matter how much we try to communicate, they think of their 401(k) as a savings account,” Pickens said.
Although employees rate effective communication as the second-most important characteristic in an employer (behind strategic direction and leadership), Richard Guinn, practice leader in communications at Watson Wyatt Worldwide, says most employers either provide too much or too little information during a crisis. Instead, employers need to “listen to the needs of their employees and respond,” he said.
The September 15 bankruptcy of Lehman Brothers Holdings sent a wave of concern among employees at Navy Federal Credit Union in Vienna, Virginia. The credit union responded with a letter from its president.
“We’re a very conservative organization, and we never ventured into subprime lending,” said Nancy Astorga, vice president of compensation and benefits. “But that doesn’t mean we’re immune to [the crisis].”
Astorga says the letter presented a realistic but positive assessment of the company.
“They want reassurance as an employee because there’s bad news everywhere,” Astorga said.
The bad news has reminded some of Black Monday—October 19, 1987—when the Dow Jones industrial average dropped nearly 25 percent. Jack Towarnicky, associate vice president for benefits planning at Nationwide Insurance, remembers the company sent a letter to employees reminding them not to get caught up in the short-term volatility of the market.
“We sent them a note saying, ‘It’s too late. The question is, where is [the market] going?’ ” he said. “Most people let it ride.”
He says workers today should get a similar reminder. In recent days, companies such as Fidelity Investments and Vanguard have provided employers with letters for their employees that remind them of the long-term gains to be had through their financial investments.
Towarnicky says a company should be consistent in its communication and actions. If employees panic and drop out of their 401(k) plans, Nationwide will do what it always does: Automatically enroll them next spring and communicate the reason for doing so.
“If they disenroll or get out,” Towarnicky said of panicky employees, “I’ll tell you one thing: I’ll be on them next April to get back in.”