Creating a Survival Plan for Tough Economic Times Kimberly A. Nash, SPHR Director of Human Resource Services Alpha Benefits Group April 9, 2009.

Creating a Survival Plan for Tough Economic Times

Kimberly A. Nash, SPHRDirector of Human Resource Services

Alpha Benefits GroupApril 9, 2009

Overview of the Economy

• March National Unemployment Rate 8.5%– 5.1% in March 2008

• February PA Unemployment Rate 7.5%– 4.8% in February 2008

• February Local Unemployment Rate 7.2%– 4.3% in February 2008

The Effects on our Clients

28% report business results are the same this year

63% report decrease in business results this year

9% report increase in business results this year

The Effects on our Clients

Layoffs

31% laid off employees in 2008

69% did not layoff employees in 2008

37% laid off employees in Jan/Feb 2009

63% did not layoff employees in Jan/Feb 2009

Layoffs

16% expect future layoffs

44% do not expect future layoffs

40% are unsure about future layoffs

The Effects on our Clients

Assistance to Laid Off Workers

43% offered no assistance

22% extended health insurance benefits

19% provided severance packages

9% provided outplacement services

The Effects on our Clients

Cost Cutting Measures

Top 4 responses

41% eliminated overtime

39% will not be giving raises in 2009

33% involuntary layoffs

31% have not filled vacant positions

The Effects on our Clients

2009 New Hires

42% expect to hire employees in 2009

34% do not expect to hire employees in 2009

24% are unsure

The Effects on our Clients

Stimulus Impact:

10% report it will help their business

7% report it will hurt their business

20% report it will have no effect

63% unsure of its effect on business

The Effects on our Clients

Stimulus Impact:

Number of Employees in your organization

1% report they will be able to recall employees

3% report they will hire additional employees

3% report they will have to layoff employees

93% report they are unsure

The Effects on our Clients

Stimulus Impact:

COBRA Subsidy

32% report those who didn’t elect COBRA will elect it

13% report those who didn’t elect COBRA won’t elect it

25% report they don’t have any eligible employees

25% report they are unsure of the impact

5% report they do not offer COBRA

The Government Response

• CHIPRA• Bailouts• American Recovery & Reinvestment Act

– $787 Billion Program (estimate)– Workforce Investment $3,950,000,000– Employment for Seniors $120,000,000– State Reemployment $400,000,000– COBRA Subsidy

• 65% for eligible individuals– Unemployment

• $7,000,000,000 for incentive payments• $25 additional per week for claimants• $500,000,000 for states to administer UC

• How will they (WE) pay for it?

The Government Response

• President Obama’s Blueprint for Change– Pay Equity – Lilly Ledbetter– Support American Labor

• Pave the way for union only on federal work• Employee Free Choice Act• Protect striking workers from being replaced

– Increase Minimum Wage– Require employers to give 7 sick days – Expand FMLA

• Employers with 25 or more employees• Paid Leave• Cover elder care, school events, domestic violence

– Flexible work schedules• Encourage telecommuting

Create a Plan• Cutting Costs? Think about:

– The long-term effects– Taking care of your customers/clients– Keeping your brand healthy– Can our employees do more with less?– Will we be more competitive when the

economy rebounds?

Layoffs• Identify who will be affected

– Discrimination/wrongful termination suits– Employees on FMLA– Train Management!

• Benefit Continuation– Final Paycheck– Vacation, PTO– COBRA

• Severance Agreements– If giving severance, have a signed agreement

• Outplacement Services

How to Survive• Be candid/honest• Show you care• Tell employees what is expected• Give employees the necessary tools• Give employees opportunities to do what

they do best• Encourage development• Remember to recognize and praise• Provide stability

YOU ARE NOT ALONE