The world is caught in a whirlwind of madness and we're all trapped in the middle of the storm. At times it seems as though there's no end in sight as these economic times test both our strength and resilience. Basically everything that encompasses who we are as human beings. The economy will either make us or break us.

I'm banking it will make us all stronger more resilient people. What we face now with the current economy is nothing new. It's very similar to what happened in 1991. Unemployment was up. Resale values dropped, while interest rates were through the roof. People with ARM (adjustable rate mortgages) were having trouble paying their loans. Bankruptcies were up. Stocks were shaky. Not like our recent past, but scary enough for people who were investing for retirement.

Back in 1991, when I worked for Frazee Industries, the company began to make changes and tough decisions due to economic dictates. We were told to cut back on controlled expenses. We complied and started by doing our own janitorial service instead of using an outside company.

We redirected a majority of our deliveries to come out of our central warehouse. This enabled us to maximize use of our driver for customer service and stocking. It also helped to cut back our gas expenditures as well as vehicle maintenance. (another controlled expense) Next the company enacted a hiring freeze.

Our store had five employees and we were open seven days a week. This really tested our mettle, as we in management took up the slack by working bell to bell to fill coverage gaps. The company also changed the hours of operation, closing an hour earlier each day and eventually closing on Sundays as well. These changes enabled us to maximize the use of existing employees to maintain customer service during peak service hours.

We maintained tighter controls on inventory levels, maximizing key items and minimizing slow items to increase turns and profit margins. (another controlled expense) We were actually selling the product before we had to pay for it. We negotiated better terms from our vendors to help increase margins.

We implemented flex scheduling to help maintain coverage. Employees would open the store and take an extended lunch, and then come back for coverage until closing. This allowed the store to maximize employee coverage without sacrificing jobs or service. Employees willing to flex were given a 40 cent an hour incentive while the program was in effect.

More controlled expenses included the following. All overtime was eliminated. No bulk stocking of office supplies or invoices, which could be ordered weekly. Wage freezes. No automatic cost of living increases, or any wage increase at all. Regulation of thermostat and petty cash expenditures were tightly monitored. Reassessment of budgeted controlled expenses to what could be modified. With progress tracked at both store and corporate level. This all made perfect sense from an economic standpoint to help keep companies solvent and profitable, and maintain jobs. The last alternative was layoffs.

Many companies are using these same strategies today. To get through these tough times the newest trend is cutting employee hours. This can range anywhere from a 32 to a 38 hour work week. All in a desperate struggle to save jobs and not compromise customer service standards.

The jobs may be saved, but there are casualties none the less. Homes are lost, marriages end. Cracking and falling apart under the stress of financial insecurity. Does anyone have the perfect answers? No. Will errors in judgement occur? Yes. Will frustrations escalate on all levels? Yes.

How does one keep and build customer confidence and at the same time allay employee fears? Now more than ever communication is the key within every level of the corporate structure. Empowering employees by giving them knowledge. This helps them to become successful partners during restructure and regrowth.

Most employees have become comfortable with the status quo, and can't always think outside the box: ie; "We've always done it that way." So most are resistant to change. Introducing change is both difficult to implement and embrace. Retraining employees with a full understanding of new company standards, policies and expectations is key. This will create allies instead of enemies.

Companies are having to think outside the box in order to stay afloat and draw in (attract) new potential customers, while maintaining a foothold in the marketplace. Staying on task, effective communication and a positive outlook go a long way in keeping a building customer confidence.

Diversification of employee talents and responsibilities are important. Expanding on an employee's knowledge makes them more valuable to the corporate structure. It's crucial in these tough economic times that the current situation be viewed as a temporary necessity to the overall health of corporate America. Soon the country and corporations will be well on the way to economic growth and stability.

Until then we can only wait and pray it's over quickly. As long as companies and employees partner for the overall success of everyone it will be.


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