<i>Dear Workforce</i> How Can We Eliminate Some Benefits Without Alienating Employees

November 14, 2001

Dear Workforce:

We are in the process of transitioning from a startup to a more corporateenvironment. We have had to begin taking away certain benefits as cost-savingmeasures. We currently offer 20 paid days off a year, which includes sick andpersonal time as well as vacation. How should I approach this with employees?

-- Needing counsel, Human ResourcesCoordinator, software/systems, Boston,Massachusetts.

A Dear Needing Counsel:

In our experience, we have noted the best way to make business cuts is to cutbig and fast. The drip-drip Chinese Water Torture technique is very damaging toemployee morale, and we recommend that you avoid it.

If you are planning to take away benefits from your employees, be sure thatyou are prepared to offer them the business reasons for the reduction. Once youhave made sure that your decisions are aligned with your business goals, letyour employees know right away. Everyone knows that sometimes it is the littlecuts that hurt the most; therefore, you'll want to make the cuts - as much aspossible - in one quick slice, and ensure all employees are well informed.

Tell your employees what you have decided and the business reasons behindyour decisions. Make sure they understand why they will be losing some of thecomforts they've gotten used to having. Every company's goal is to grow thebusiness, and hopefully your employees have the same goal. Your employees may behurt or confused at first, but ultimately they will understand that the cutswill have a positive effect on the company's bottom line.

SOURCE: Tom Silveri, president and CEO, Drake Beam Morin, New York, N.Y.,June 22, 2001.

LEARN MORE: See "Keep'Em Happy," for otherperspectives on similar HR issues.

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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