Following up on our last survey of our Top Small Workplace and Best Boss honorees in Q2 2009, in Q4 we once again surveyed their leaders to pick their brains about their successes and setbacks in this still-difficult economy. This included the newly named 2009 Top Small Workplace winners. Following is a summary of what we found.
Six months ago, access to credit was a chief concern. While it certainly has not gone away with banks continuing to hold or reduce balances on existing accounts and often denying access to additional credit, 67 percent of respondents said conditions at the bank have remained the same or improved. Twenty-three percent said conditions have worsened since Q2, and the remaining 10 percent said the credit crisis has had no effect on their business because they don’t require it to buy what they need, or they operate debt-free.
Not much has changed in their strategies to attract and retain customers while also holding onto their best people. The key difference from six months ago is that more firms have implemented salary cuts for employees – 30 percent in Q4 versus 17 percent in Q2.
On average respondents are cutting salaries by 9 percent. We know through qualitative feedback that the decision to cut wages was not only often reached by asking employees whether they would agree to this versus cutting staff – as opposed to implementing cuts with no employee input – but that these cuts also tended to include the leadership team.
Here are two other cost-cutting steps the companies are taking, followed by average reduction levels:
- Cut operating expenses: by 15 percent
- Staff layoff: 17 percent of the workforce
Other noteworthy actions they are taking in response to the tough economy include:
| Action | Industry | No. Employees |
| Eliminated travel, entertainment, and major company parties such as holiday.
|
Construction | 501-1000 |
| We took the opportunity to get more aggressive in our marketplace through investments in new markets. While competitors languished we rushed forward and have captured significant market share.
|
Information Technology | 251-500 |
| Since there is no “extra” money for raises, we gave each employee an extra week’s paid vacation.
|
Other | 1-50 |
| Reduced Capital Equipment expenses and deferred salary increases.
|
Engineering | 51-100 |
| Increased marketing at the consumer level.
|
Consumer packaged goods | 101-250 |
Even with the above actions, though, it appears that in the near term these companies as a whole are in survival mode: The majority of respondents (35 percent) expect profitability to remain flat over the next 12 months. Twenty-six percent expect a decrease in sales of over 10 percent; almost as many (22 percent) expect an increase of 5-10 percent.
Finally, we asked our honorees about their strategies to best position their firms as the economy improves. Here is some of their selected feedback, which may help your organization do the same:
| Steps taken | Industry | No. Employees |
| Additional marketing, expanding our use of technology.
|
Construction | 1-50 |
| Financially verifying clients’ ability to pay.
|
Construction | 1-50 |
| We are facing very significant short-term growth, so we’re focused on getting high quality staff aboard to grow with us.
|
Other | 51-100 |
| Focus on new accounts and channel partnerships, and on differentiating ourselves through the interactions we have with our customers.
|
Manufacturing | 101-250 |
| Redefining our business model to be more mobile, flexible and efficient.
|
Other | 1000+ |
| Investing in our brand at the retail level, preparing to launch new products.
|
Consumer packaged goods | 101-250 |
| Increased focus on selling.
|
Engineering | 51-100 |
| Keeping expenses stable.
|
Health care | 251-500 |
| Going on the offensive, developing new service lines and building better capacity.
|
Consulting | 251-500 |
| May leave positions unfilled, cutting back on marketing expenses, looking for efficiencies.
|
Travel | 1-50 |
| We’re designing new product, with more features, and taking some manufacturing offshore.
|
Other | 1-50 |
| We will consolidate the new gains and ensure we keep the captured market share as part of our base.
|
Information Technology | 251-500 |
| Very cautious in hiring. Marketing to gain market share while competitors stay in survival mode.
|
Manufacturing | 101-250 |
| Increase marketing efforts, decrease spending.
|
Real estate | 1-50 |
| We are working very hard to maintain our workforce without further reduction. We are going to be closed between Christmas and New Year’s (traditionally a very slow period in construction) in order to reduce costs. | Construction | 501-1000 |