The Importance of Keeping a Company's Culture During an Economic Downturn
Recently, I found myself sitting in "mixed company"—a group of 10 people, half Human Resources executives and the other half Finance executives. Not unexpectedly, a heated debate ensued about how important it is for employers to make clear how much they really value their employees, particularly in these tough economic times.
The Human Resources executives argued vehemently that, now more than ever, employers should do everything they can to illustrate to employees their commitment to them and their workplace culture. As one very senior Human Resources executive for a Fortune 100 firm pointed out, "The people who are left in companies these days are extremely stressed, confused and suspicious due to the conflicting messages they receive. On one hand, we tell our best employees that our company culture mandates that we take care of those employees who keep their heads down, do excellent work and remain loyal to the company. On the other hand, if we experience just one tough quarter, we fire a group of our best and brightest—not to help the company avoid financial ruin, but to clean-up our balance sheet and make us more competitive."
The Finance executives, however, made a very compelling case that focusing Human Resources on something as "soft" as valuing employees is unwise and irresponsible. Essentially, they took the position that, in this very tough business environment, employees should be glad to have a job. They all shared anecdotes about the "whining employees who had developed an entitlement attitude, which they thought was symptomatic of a workplace culture problem that the economy would help them fix."
At some level, both sides are right. Tough economic times call for closer scrutiny and justification for every line item in the budget. That being said, employers should keep in mind that the economy will improve in a reasonably short period of time and employees, especially the most sought-after, will remember if an employer kept true to its stated commitment to its employees and workplace culture. The fact of the matter is that a lot of employers give lip service to how much they value their employees and how committed they are to creating a great workplace culture when times are good; the real test is whether they remain committed to these things when times are not so good.
I heard an employee sum it up best one day when asked about the ideal company culture for her: "I want to work for a company where the culture is such that 1) layoffs are the absolute last option and only a possibility to avoid bankruptcy; 2) my health and welfare benefits are affordable and provide me and my family quality coverage; 3) Management is fair and honest about my work performance; 4) we receive regular and candid communication about how the business is performing; and 5) the company doesn’t make changes to their values, core principles and cultural values in response to short-term market fluctuations.
One of the things we know is that employees judge a company based more on what it does than what it says—especially during tough economic times. Just recently I read a research report conducted for Charles Schwab Corp. by CFO Research Services that found "a quarter of U.S. employers have eliminated matching contributions to employee 401(k) retirement plans since September to save money amid the economy's downturn . . . [and] a quarter of U.S. employers also have instituted limited enrollment rather than open the savings plans to all employees. One can’t help but wonder what messages employers are sending their people about how much they’re really valued.