START THE YEAR OFF RIGHT!

BOOM TIMES AND CHALLENGES AHEAD

Harry S. Dent's recent book, The Next Great Bubble Boom, discusses the effect of demographics on investment opportunities through the rest of this decade. He sees 2005-2009 as boom years, with an extended bust to follow. Dent's insights (he has an excellent track record as a forecaster) also apply to the future of the workplace. Here's how he sees the future, along with some of our insights:

• The key to understanding change and forecasting future trends is not to understand their apparent complexity, but the inherent basic principles and formulas that drive such change. In other words, step back and look at the big picture. The biggest picture on the horizon today has to do with the financial impact of retiring baby boomers spending (and then, not spending).
• The major growth areas will continue to be technology and health care. Employers will have problems finding employees to staff this growth; for example, the health system already has a shortage of some 500,000 workers. If you aren't directly active in these areas, figure out how you can at least be indirectly involved (i.e., supplier relations, etc.)
• Says Dent: “The first wave of baby boomers will start to exit the workforce faster than echo baby boomers will enter, especially from 2003 to 2005. Then the second wave will exit, making a steep drop to 2010 ... This means the only real increase in our workforce, on average, will tend to be immigrants - so, if you think hiring is tough now, it should be even more difficult than it was during the boom cycle of the early 90s. Given this challenge, creating, nurturing, and retaining in-house talent will be a must. You might also consider designing your business with fewer employees.
• Maximize your career, business, and investment activities by 2009 to prepare for the downturn that will follow. Between now and then, begin retirement planning or reinvent your company and yourself for the difficult years ahead. You should have sold your home and business and have plenty of cash in the bank. If you intend to get an MBA, during the downturn will be the perfect time to do so.
• Most employees who don't own stocks work for companies without 401(k) plans. Dent sees a huge market for benefit firms to support these companies and their employees. He also recommends providing workers with a financial education that they might not be getting elsewhere.
• Four in five millionaires are self made — and this move toward financial independence is growing. To avoid losing your most talented employees to this trend, offer them greater job flexibility and a piece of the pie.
• According to Dent, premium firms will rise the fastest throughout this decade. That's why it's important to target the rising affluent class. This segment of the market will focus not on price, but on providing quality products and services tailored to the individual and delivered on demand.
• Finally, Dent argues that you can't simplify work or create real-time service past a certain point without giving front-line workers the ability to make decisions directly for customers, and direct accountability for them at the bottom-line profit level — just like a small business owner. We couldn't have said it better ourselves. Worker empowerment means open-book management, continuous training, and customer feedback. It also means that your business must create standards for decision making (i.e. Nordstrom's, where the customer is always right).

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TRAINING PROGRAMS

In today's knowledge economy, you need well-trained workers to leverage your bottom line. Training can be either technically or emotionally based. Although it's relatively easy to provide technical instruction through written or computer-based resources, emotional training requires people to communicate with each other directly.

For example, although manuals and online resources might be effective in teaching Excel spreadsheet applications, they can't deal with the emotional issues involved in sexual harassment training. Only dialogue can do that.

To develop and maintain effective training programs, we recommend these guidelines:

1. Create a training system. Commit to training as a process, rather than an event. Set clear standards for your hard and soft skill-set needs. Create a strategic plan, budget, and schedule.
2. Provide the right tools. Not all training resources are created equal. For example, some online technical training applications are better than others. To test which programs work best, have small groups of employees try different programs. Then compare changes in their productivity and adopt the one that works best.
3. Follow up. If one-time training worked, you could ride a bike after reading a single book on bicycling. Provide a continuing process to help employees incorporate what they learn during the training experience.
4. Offer incentives. Give your employees rewards or payoffs for their participation in training programs. These incentives can be either financial or non-monetary perks (dinners, entertainment tickets, and so forth). Reward and reinforce the learning experience so that the employee wants to repeat it.
5. Leverage training. Whenever an employee gains a valuable insight during a training session, encourage them to share this information with co-workers who it might affect. Multiply the impact of training by having workers immediately use what they've learned to help the company run more effectively. HR That Works users can try the Employee Self-Study Bonus Report.

    

“There is no 'why' in 'I'll try'”

Don Phin ,
Author and Professional Speaker

This issue discusses:

AVOID SALARY REDUCTION SNAFUS

If the faltering economy has you considering salary and benefit reductions, take heed! Legal experts recommend these precautions:

• Consider contractual obligations. Some workers might have a contractual right to a minimum salary payment that can't be decreased without their agreement. If an employee agrees to a modification, the contract will usually spell out how you must document it. In addition to employee consent, some employment contracts might require a company representative to agree to the change or set a notification period before a modification can begin.
• Factor in timing. Employers aren't permitted to make retroactive decreases because they can't recapture wages that an employee has already earned. Give enough notice for employees to plan accordingly. This includes deciding whether to continue working for you if they'll be earning less.
• Put the decrease in writing. Include a statement that the reduction is permanent and that the employee can't recapture the difference in pay. Make the decrease consistent with your pay periods; mid-cycle pay adjustments are often confusing and error prone. Avoid moving too quickly and risking faulty communication. Plan salary reductions with enough time to communicate the changes clearly.

Modifying compensation carries obvious risks. As an employer, failure to follow proper procedures could create serious consequences — in some states, including personal liability for unpaid wages. Never promise employees that a salary reduction is only temporary. Employees who receive this promise might later demand the unpaid portion of their wages.

SUGGESTION SYSTEMS THAT WORK

Unfortunately, most suggestion systems don't work. That box on the wall with a suggestion sign above it often has more dust on it than suggestions in it. The reason: Employees tend to be more concerned about retributions than contributions.

To bypass this inherent roadblock, require workers to come up with at least one suggestion per month as part of their job description. Begin by having employees offer suggestions that will improve the way they do their jobs. As they become more comfortable with the system, they can start focusing on other areas.

"Once you have employees making suggestions, concentrate on their efforts, not the results they produce. As soon as people realize that it's safe to offer suggestions, the quality of their input should improve. Business owner Marty Edelstein took the advice of management guru Peter Drucker and introduced a suggestion system that made an incredible difference for his company. He wrote the book I Power to describe and share its benefits. Edelstein held fun and enlightening I Power sessions that offered employees $1 for any suggestion and $2 for good ones. For more information on I Power, and inexpensive tools for adapting this system to your business, visit http://www.i-power.com/.

Never underestimate the power of an effective suggestion system. Today's organization must be proactive to survive, let alone thrive. Management doesn't have a monopoly on insight. For example, when a new worker in a factory saw a work area for robots lit up, he asked why the machines needed light to operate. The answer was that they didn't — and his suggestion saved the company thousands of dollars. There's no way to know the source of your most successful suggestions, so ask and find out.

CASES OF THE MONTH

Our legal staff offers this review of top cases that might affect your business.

(PDF) (WORD)

FORM OF THE MONTH:

ORIENTATION CHECKLIST

(PDF) (WORD)

We all know how much first impressions count. It is important to spend sufficient time training and orienting new employees. Some companies make orientation a fun exercise using scavenger hunts and other game-like formats. Make this checklist work for you.

The information presented here is general in nature and does not constitute legal advice. Due to local and state laws and ordinances, an individual article might not apply in every jurisdiction.