Work through the budget
Holdren doesn’t like the idea of letting people go any more than you do, so there are many things you can do after you look through the production of employees.
“Once you get through that exercise, and this is exactly what Huron is going through right now as we budget for ’09, you say, ‘OK, if we decide to keep all of these people, then what we may have to do if revenues don’t come and times are short, then people may have to get less bonus,’” he says. “So, in essence, we’ve kept the team together, we’re going to get less pay, but we’re going to stick it out for a rainy day.”
The idea upset a few employees, but in a market where job losses are headline news, Holdren says most people are happy to have a job and the potential for continued high earnings.
“I’m trying to keep all of our employees grounded in these are unusual, tough times,” he says. “Having a job and us not cutting your base pay, not cutting benefits and giving you a good environment to work in, you ought to be thankful that you are working for this company. Don’t mope around that maybe you didn’t get a $5,000 to $10,000 bonus.”
Beyond the savings in bonus pay, Holdren looked at annual outgoing expenses.
“The third thing you examine is all the things you’re spending money on,” Holdren says. “Do you really need to travel? Could you cut back a little bit on training? You just have to go through line by line.”
When you go through that process, you have to make a decision on what things mean to your culture and your business.
“Just a little example is whether you should cut Christmas parties,” Holdren says. “Our people have worked so hard, and our young people enjoy getting together and seeing each other at such a joyous time, and those things are just too short run. You need to continue to have some things that are key to your culture and spend less in other areas.”
To Holdren, the cost of cutting a company event like a Christmas party would be more damaging than cutting some of the company’s travels during the year. He takes a similar look at the budget Huron has for entertaining clients. While it would save some money to cut that expense entirely, he knows that many of his clients have cut their own entertainment costs. This means keeping some of the budget will actually give him an advantage.
“Some clients would say at this stage, ‘I don’t want you to spend a lot or be extravagant,’” he says. “But there will be other situations where if they haven’t been able to do anything because of their (financial situation), and they might want something, so you just have to kind of look at it on a daily basis and see what the value proposition is.”
These are decisions you have to make on a case-by-case basis, but the key is to keep your company vision in mind to preserve the things you can in both your company culture and your value to your customers or clients.
