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Monday, September 22, 2008

Another Work From Home (WFH) Update

In this picture Kristie Cantrell is sitting next to her empty cubicle in the space she now shares with Jack Leichty. The two started today working on alternating days in the office and working from home the rest of the work week. The big move was Friday but has been in the works for weeks. Note that both their name plates are now affixed on the same cubicle wall. To make sure that two people could work from the same space, we required that Kristie's former space be completely emptied, wiped down, and that it not be used for storage. Both of them now have 100% of the materials they need for their immediate work area in one cubicle, or at their home offices.

This was no small feat. Since neither uses a laptop IT moved both of them from their desktop PCs to a virtual desktop on the company server. That requires software that's in its evaluation stage and will expire in two weeks. After that, a second 60-day software evaluation will run the virtual desktops and buy us time to make a decision as to if this software is an appropriate purchase. We moved one under-counter filing cabinet into the newly shared cubicle; otherwise the fixturing is the same.

Last Thursday we had another virtual staff meeting; the first to feature three staff members joining via video and the first to include Tom Davies, our HR Director in Plano, Texas. The video was perfect while the audio was distorted and distracting. Next meeting we're going to hook everyone up via conference call using the telephone for audio and Oovoo just for the video. We'll report back on how that works.

In a related project, we've begun going through all our file drawers, file by file, and purging/shredding/archiving whatever isn't needed for daily operations. In two weeks our goal is to move all our files into one file room, move Amy Lindsey into Kristie's vacated cubicle, and move Payroll into an empty space next to the file room. With some help from Facilities, our goal is to empty eight cubicles in one block to make way for new neighbors, whenever that need arises. The starting point for this move, however, was the extra cube made available by WFH.

We have always resisted close neighbors in the office given the confidential nature of what we do in HR. What we've discovered, however, is that our use of Pandion Instant Messenger (IM) to communicate with each other while working from home has translated into IM use with each other while in the office. Also, the digitization of much of our files and the purge I mentioned above will open up more work and meeting space in our file areas. The verbal communication in the department has decreased to the point that we're confident that we can communicate with each other without being overheard even by those over the wall in the next row of cubicles.

So what's the critical learning, the next step, and the future of the WFH test?

1. Cubicle sharing is possible now - Any two people in the test who have a laptop and a two-line capable desk phone could move in together. This requires a change in scheduling, but not much of a change in fixturing or anything else. Sharing desktop PC resources is still a few weeks off, but if the test shows a positive cost-benefit then I believe its coming.

2. Nothing Beats a Good Purge - Its worth your time (and space charges) to look in those files nobody ever opens, in those old documents and you haven't seen in years, or to archive off-site (with a two or three year destroy date) those documents that you "might" need "someday". They don't have to be in the desk drawer at your fingertips if they're "just in case" files.

3. Digitize! - We cleaned out the recruiting files from 2002, the last year that we weren't on an electronic application system. Those files took up more space than all the recruiting files for all the years since 2002.

4. Open Every Drawer - Those 2002 files were in a cabinet I thought was being used for payroll, until payroll said that wasn't their cabinet. How many of these do we have company-wide at $17/sq. ft.?

5. Use IM - This minimizes the chatter in your office, drastically reduces your email load (and therefore email server space requirements), and increases communication speed both for those at the office and those at home.

6. Set up a Meeting Area with Web cams and Oovoo - Some areas in the test are "just" using no-meeting Fridays as WFH days, and that won't lead to space sharing. To truly test the WFH concept people need to be working at least two days from home a week. In order to have meetings as-scheduled and test WFH requires that meetings will often include those joining via web cam. We use my office, and we have a shared departmental laptop with a camera that we can use in shared conference rooms when my office isn't available.

New Business

  • We welcome the Law Department into the WFH test; three of their six staff members are now working part-time from home as of last week. This brings the total number in the test group to 145.
  • We are continuing discussions with Nashville's Metro Transit Authority (MTA) regarding ways that we can combine WFH and mass transit as a strategy to combat fuel prices and shortages.

Tuesday, September 16, 2008

Don't Mess Up Your 401(k) in a Down Market

Okay, this is not investment advice. If it were, why would you take it from an HR guy when you have so many registered financial advisers at your disposal? This is just a set of observations about mistakes I've seen people make in knee-jerking to a falling market. Take this for what its worth, research your own 401(k) investments, get competent advice, etc...before making investment decisions. Meanwhile, consider this premise; that the market has been here before and come back, that Phil Graham is right in his assessment that as a nation we could be a little more resilient, and that television news coverage is sensationalism detached from the reality of the market. In other words, this isn't a market for the faint of heart but neither is it a meltdown, a historic depression, or any of the other hyperbole you've heard on television.

1. We've Been Here Before- Check out the historical chart of the Dow Jones averages starting in 1900 and continuing up to the present day. Two things to note; look at all the big drops along the way, and take a look at the difference between where it started and where it is today. The market always rebounds; always rebounds. In my working lifetime we've had three major corrections; the junk bond correction or "Black Monday" in 1987, the "Dot Bomb" correction of 1999/2000, and the "junk mortgage" correction of this week. This happens every few years when greed and speculation come before the underlying value proposition of an investment. When the bubble bursts there's a sell-off, market values correct, and then the market value recovers. On Black Monday Sam Walton lost $1m; when asked how he felt about it he said, "So what, it's all on paper". He died a billionaire, by the way.

2. Its Just On Paper Until You Act - When you trade mutual funds after a loss you make those losses real. Up until that time you hold the same number of shares or fractional shares as you did before the price dropped, they're just worth less. Once you move from that fund to another within the plan you've sold those shares for the lower value and bought others at their low value. If that's what you intend to do because you think the other fund will fall slower or rise faster, that's up to you. Just know what you're doing before you react to the falling price of that fund.

3. You're Probably Not Retiring Today - Unless you are, you don't need your 401(k) money. No action is required on your part in reaction to a falling market. Think about the number of years between now and when you retire, go back that many years on the historical chart above, and see how much the market has risen in that time. This is the appreciation in value that you'll miss if you panic. AOL's Finance page had a great article on this topic earlier today that's worth the read.

4. Consider Increasing Your Payroll Deduction - Remember, your 401(k) is not a bank account where you track the dollars. Its a collection of mutual fund shares that you purchase over decades and watch them appreciate. If the price of cars drop and you need one, that would be the time to buy, right? Same with houses or any other "thing" that you need. Well, you need mutual fund shares to sell when it comes time to retire. If they're selling at a discount, you might consider buying more while the price is right. The only way to do that is to increase your payroll deduction going into your 401(k). That sounds counter intuitive when food and gas prices are rising and CNN's financial guru's are shrieking like little girls, but its not always a bad idea.

In my experience, the people who've made a bad market into a bad retirement move are those who react by selling their shares, going to cash or stable value funds, and/or stopping their deductions into the plan. Personally, when the news is this bad I just stop checking my fund balance for awhile and remember that I have 23 1/2 years before I'm social security eligible, that activity is not progress, and that motion is not necessarily forward movement. Often the smart move is no move at all, or a move in the opposite direction of the herd.

Again, seek competent advice before making investment decisions.

Saturday, September 06, 2008

Slow Economy is an Opportunity to Build Loyalty

Financially I'm a contrarian; when times are good I try to save, and when times are bad I purchase. Every down economy is an opportunity to gain value. The same is true about customer and employee loyalty; this economy is providing us a period of great opportunity.

Like practically every other company operating in this country, the economic environment of the past few months has been challenging. In my HR position I'm involved, as you might expect, with efforts to control our employment costs which included a staff reduction in April. As a department head, I've also been involved in controlling costs including attempts to cancel or negotiate my way out of contracts charged to my department. We also manage fully-insured employee benefits plans that cannot be changed until the end of March, so we're making sure that both employees and the company get the most for the money that we are obligated to spend. Watching vendors and others outside our company operate in this tough environment reminds me of a wise saying from one of my colleagues, "Its every American's God-given right to be stupid". In the scramble to get every dollar possible in a tight environment, I see people making short-sighted decisions and missing a huge opportunity to build customer and employee loyalty. Here are a few examples.

Job Boards
Literally 48 hours after I signed our annual agreement with a national job board company, word came down that we were going to have to reduce staff. The contract period didn't start for 45 days, we had been a loyal customer, paid timely, for years, and the contract ink was not yet dry. I immediately contacted that company and told them we would have to cancel the contract. Their response; the contract has no provisions for cancellation. I offered to pay a reasonable cancellation fee of $1,500 for their time and trouble, and they refused. I consulted with our General Counsel and we agreed that our notice was timely and that this company would incur no damages if we breached. I wrote them a letter cancelling the contract and offering again to pay a cancellation fee. This was February.

After months of nasty-grams and threats and phone calls, this now ex-vendor sent their "Final Collection Notice" from their litigation department; $1,525 in cash in two weeks and pay the balance if we ever use them again. I took it. Now think it through; they could have worked with us, collected $1,500 in February, kept a loyal customer, and had our business next year when (I suspect) we'll be back in hiring mode. Instead, they spent untold hours of staff time, including staff attorney time, to collect $25 more in September, offended a good customer, and provided us a financial incentive not to use them ever again. Am I missing something here?

We similarly cancelled a local job board subscription, worth about $4,500 per year. We offered to pay 1/4 of that as a cancellation fee, and were informed that the cancellation fee would be $9,500, or more than double the cost of the annual subscription. We're still dancing with these guys, but the really bright thing they did this week was turn down a pre-paid ad from us because we owed an outstanding balance. Again, they could help us out in a tight year, keep a good customer whose always paid in full and on time, have our business on a pre-paid basis this year and have us back on board next year. Instead, they've offended us (these folks are particularly nasty over the phone), won't take revenue from us (I placed the ad elsewhere in 10 minutes), and may or may not collect anything more than what we've offered.

We've been dealing with an insurance carrier of late whose service has been less than what we'd like. They misrepresented their claims payment platform and capabilities, botched the eligibility file leading to problems when employees go to their providers, and now owe us money under the performance guarantees in their contract with us. In negotiating the payout back to us their offer was to reduce our premiums by 5% for the rest of this year. My offer back to them was this: we're not satisfied so you're fired effective March 31, or you can extend the reduced premium through the following plan year and give yourself essentially 18 months to win us back. After two months of negotiations, they declined. Its a new benefit, so we'll notify our enrollees this next week that its going away March 31 so that they can use it before its gone. The discounted premium we sought will be eclipsed by the losses the carrier will incur by having strong utilization for the next 7 months and then losing the premium revenue before they can recoup.

I have no war stories on this, yet. The one staff reduction we've done was executed in such a way that we've stood by everyone terminated through severance, outplacement, putting them on a preferred rehire list, etc... and almost all of them have now found jobs. That's been noticed by those not cut and its helped to reduce some of the nervousness in the workforce. Not every company does it this way.

Every day I read where companies are cutting staff. With January 1 approaching, the period when most companies renew their employee benefits, I'm starting to hear of other companies making drastic cuts in benefits and cost-shifts to their workforce. There's a problem with that strategy, and I know of what I speak. Hard economies suppress turnover due to lack of options, but bad economies always turn around and people have long memories. Standing by your people now, when money is tight at home and the prospect of unemployment is scary, builds loyalty and retains talent once things turn around. Leadership teams and HR departments all over are undertaking efforts to squeeze costs at the expense of their workforce; efforts that will lead to fruit basket turnover later. Like my three vendor examples above, employers can throw people overboard to keep profits high and lose them forever, or stand by them and build loyalty.

This is a time of opportunity.

Thursday, September 04, 2008

You'll be Proud of the Lynne Spears Book

I'm an HR guy so this isn't a book review; that's not what I do. This is about our culture as a Christian company and why you shouldn't be concerned about this book at all. I'll be the first to admit it, I was one of those in our workforce who originally raised concerns about the book when word first leaked out internally that we were publishing it. Before there was an internal announcement of the book and its intended subject matter, many of us in the workforce jumped to the same conclusions as the general public that this was either a tabloid tell-all or apologetics for Britney's antics. Some of the internal subtitles were: "It's not my fault", or "See, I have two other normal kids", or "Scratch that, I have at least one normal kid". As with any instance where gossip occurs, it wasn't (behaviorally) our finest hour.

I wanted to be able to assure our workforce that this book was consistent with our values and culture, so I asked for an advance copy and got it. I'm glad I did. I've passed this same copy to two people close to me, both women, and asked them to read it. Both came away with the same impression; that Lynne comes across as sincere, engaging, and genuine. While there are some new details about the family's life and struggle, this isn't a tabloid tell-all. It's more about what happens to a normal small-town Southern family when thrust into the center of the tabloid universe.

Internally, everyone to whom I've spoken on our staff who's met Lynne is taken with her. She's reported to me to be genuine and authentic.

Since we're still a couple of weeks away from the street date that's all I'm going to say. Besides, we want people the buy the book! Just please be assured that nobody is more concerned with keeping us true to our culture and core values than am I, and I think we'll be proud to have The House logo on the spine of this book.