Creating a Survival Plan for Tough Economic Times Kimberly A. Nash, SPHR Director of Human Resource Services Alpha Benefits Group April 9, 2009

Overview of the Economy March National Unemployment Rate 8.5% –5.1% in March 2008 February PA Unemployment Rate 7.5% –4.8% in February 2008 February Local Unemployment Rate 7.2% –4.3% in February 2008

The Effects on our Clients 28% report business results are the same this year 63% report decrease in business results this year 9% report increase in business results this year

The Effects on our Clients Layoffs 31% laid off employees in % did not layoff employees in % laid off employees in Jan/Feb % did not layoff employees in Jan/Feb 2009

Layoffs 16% expect future layoffs 44% do not expect future layoffs 40% are unsure about future layoffs

The Effects on our Clients Assistance to Laid Off Workers 43% offered no assistance 22% extended health insurance benefits 19% provided severance packages 9% provided outplacement services

The Effects on our Clients Cost Cutting Measures Top 4 responses 41% eliminated overtime 39% will not be giving raises in % involuntary layoffs 31% have not filled vacant positions

The Effects on our Clients 2009 New Hires 42% expect to hire employees in % do not expect to hire employees in % are unsure

The Effects on our Clients Stimulus Impact: 10% report it will help their business 7% report it will hurt their business 20% report it will have no effect 63% unsure of its effect on business

The Effects on our Clients Stimulus Impact: Number of Employees in your organization 1% report they will be able to recall employees 3% report they will hire additional employees 3% report they will have to layoff employees 93% report they are unsure

The Effects on our Clients Stimulus Impact: COBRA Subsidy 32% report those who didn’t elect COBRA will elect it 13% report those who didn’t elect COBRA won’t elect it 25% report they don’t have any eligible employees 25% report they are unsure of the impact 5% report they do not offer COBRA

The Government Response CHIPRA Bailouts American Recovery & Reinvestment Act –$787 Billion Program (estimate) –Workforce Investment $3,950,000,000 –Employment for Seniors $120,000,000 –State Reemployment $400,000,000 –COBRA Subsidy 65% for eligible individuals –Unemployment $7,000,000,000 for incentive payments $25 additional per week for claimants $500,000,000 for states to administer UC How will they (WE) pay for it?

The Government Response President Obama’s Blueprint for Change –Pay Equity – Lilly Ledbetter –Support American Labor Pave the way for union only on federal work Employee Free Choice Act Protect striking workers from being replaced –Increase Minimum Wage –Require employers to give 7 sick days –Expand FMLA Employers with 25 or more employees Paid Leave Cover elder care, school events, domestic violence –Flexible work schedules Encourage telecommuting

Create a Plan Cutting Costs? Think about: –The long-term effects –Taking care of your customers/clients –Keeping your brand healthy –Can our employees do more with less? –Will we be more competitive when the economy rebounds?

Layoffs Identify who will be affected –Discrimination/wrongful termination suits –Employees on FMLA –Train Management! Benefit Continuation –Final Paycheck –Vacation, PTO –COBRA Severance Agreements –If giving severance, have a signed agreement Outplacement Services

How to Survive Be candid/honest Show you care Tell employees what is expected Give employees the necessary tools Give employees opportunities to do what they do best Encourage development Remember to recognize and praise Provide stability

YOU ARE NOT ALONE