It's a great relief to be coming out of the recession, but there are special challenges for employers, says Attorney Matthew Effland. Employees' expectations and management's plans may be at odds—and that might turn survivor guilt into survivor anger.

Effland, a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart's Indianapolis office, made his remarks at the recent Society for Human Resource Management Conference and Exposition in San Diego.

Here’s the situation, Effland says:

  • The company was hit hard by the recession.
  • 20% of the workforce was laid off.
  • The remaining workforce agreed to wage freeze.
  • Things are turning around now.
  • Orders are increasing.
  • The company announces no more layoffs.

Good news. And yet, employees are disgruntled. Why?

  • Surviving employees still feel overwhelmed.
  • They're still doing two jobs.
  • There's still a wage freeze.

And what happens when the workplace is pressurized or uncertain? Here's what studies show, Effland says:

  • 87% of employees say they are less likely to recommend their company as a good place to work
  • 64% of companies say that productivity decreases
  • 81% say that customer service decreases

And then, from the employee's viewpoint, things get worse:

  • The company weathered the recession, but lost key people.
  • To fill these positions as the economy turns around, the company makes lucrative offers to star performers at competitors’ companies.

Current employees openly resent the new hires. Why? The survivors took pay cuts and here come the "chosen ones" at premium salaries.

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To minimize ill feeling, Effland says, consider the following:

1. Evaluate actions taken during the economic crisis. Did the company freeze salaries? Were pay cuts instituted? Returning current employees to the status quo or instituting modest increases as the economy improves will improve the chances that employees will be less resentful of the new hires.

2. Create new job categories for new hires. New job categories can blunt the impact of a new hire making more money than a current employee. It is crucial to differentiate employee skill sets when this option is used, however, to minimize litigation risks.

3. Hire outside contractors where possible. In cases where high-salaried functions, such as Internet operations or specific research projects, are not part of the firm’s core mission, companies can avoid pay-disparity issues by hiring outside contractors.

What About When You Become the Tree?

While you are cherry-picking from your competitors, they may be cherry-picking from you. Here are some of the tools Effland suggests for increasing employee satisfaction:

  • Shortened waiting periods that make your benefits more appealing than the competition's
  • Stock options and stock purchase plans for employees other than executives
  • Profit-sharing
  • Benefits for domestic partners
  • One-on-one time with company executives

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  • Financial planning services
  • Childcare and eldercare services
  • On-site food service (including take-out meals for nights when employees work late and don't have time to prepare a meal for the family)
  • Relaxed limits on personal e-mail or Internet use
  • Bringing pets to work
  • Flexible work hours, days, weeks
  • Job rotations
  • Job sharing
  • Telecommuting
  • Virtual offices
  • Paid time off for volunteer activities

In tomorrow's Advisor, what rights laid-off employees have, and an introduction to an extraordinary program just for smaller, or even one-person, HR departments.

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