Sandy Boucher, CFE Senior Investigator Grant Thornton LLP

The Art of Downsizing
MAKING THE RIGHT CUT

The economic challenges faced by many industries over the past few years have often left organizations with little choice but to downsize. The hotel industry has been no exception. Downsizing is never easy and a number of considerations factor into the decisions on where to cut. Generally, employment standards legislation usually requires certain notice periods be provided to employees prior to the termination. Otherwise, termination payments will be required. In addition, some provinces have additional requirements with respect to group terminations where a number of people are terminated simultaneously. It is always important to review the applicable legislation prior to making decisions with respect to terminations.

Mark Wentzell CA, CIRP Grant Thornton Ltd.

The ultimate goal in downsizing is to enable the business to continue on through the difficult economic times and to succeed in the future. It is important to keep in mind the ultimate goal of long-term viability when making decisions regarding downsizing. With respect to the hospitality industry, there are a number of specific issues to consider when determining who, when and how many to layoff.

In the hotel industry, many employees are unionized. Downsizing in union situations requires additional considerations. In particular, the collective agreement should be reviewed to determine the protocol for layoffs. Some collective agreements require a proportionate amount of non-union layoffs to union lay-offs. If the collective agreement does not contain provisions on terminations, it may be necessary to negotiate with the union with respect to the downsizing specifics. A further consideration after downsizing occurs is “bumping” between departments. Employees from other departments who have the minimum required seniority and other qualifications may attempt to move into more desirable positions after the downsizing.

Another consideration facing the hotel industry is the limited number of adequately trained staff. Once employees are terminated, they will often find employment with other operators and, when business returns to higher levels, the hotel may have a more difficult time finding properly trained staff to fill previously cut positions.

In order to avoid terminating employees, many operators have chosen to cut back hours or shift lengths to keep the skilled employees yet reduce wage costs. While employment standards legislation and most union contracts do not have required numbers of hours per week, they do usually contain provisions regarding minimum shift lengths (i.e. four hours). If employees are working shifts of less than the required length, the operator is required to pay for the minimum number of hours. Therefore, operators should be aware of the minimum shift length when reducing hours and preparing schedules.

In the hotel industry, revenue is driven primarily by occupancy rates. Fewer guests mean less money. In terms of staffing, some departments such as housekeeping and food and beverage are variable with occupancy rates. Others such as maintenance and front desk are relatively fixed. Therefore, it is often the variable departments that are chosen for downsizing prior to those with more fixed needs. It is a similar case between part-time and full-time employees. Often, part-time employees are laid off prior to the full-time employees.

However, full-time employees are often recipients of benefit plans, which may not be available to part-time employees or, if so, may have lower costs to the operator than those for full-time employees. Operators may also want to consider these costs when making downsizing decisions. When employees are laid off, it is typical in the hotel industry that the benefits cease and there is no carrying of benefits.

For most hotels, there is a peak season and an off season. Many hotels hire the additional employees required for the peak season on a casual basis only. Hiring employees on a casual basis versus a permanent basis allows the employer to potentially avoid more onerous duties and costs associated with a termination. Given the nature and initial expectation of their length of employment, seasonal employees hired on a casual basis, may be subject to layoffs prior to more permanent hires.

In addition to the above issues and areas for consideration, operators should also consider the effects on the remaining employees in a downsizing situation. Mass terminations often cause anxiety among the remaining employees and a loss of overall workplace morale. The remaining employees may feel less loyalty to their employer and workplace and consider their employment potentially at risk. Communication with remaining employees is essential to minimize the negative effects of downsizing and avoid losing skilled employees necessary to maintain the business.

While downsizing is never an easy task, it is often the only choice for many operators to make it through difficult economic times when occupancy rates are low. In order to ensure long term viability, it may be necessary to make short term reductions to staff. In other cases, operating inefficiencies may be masked during good economic times and are not realized until a cash crunch occurs.

Mark Wentzell, CA, CIRP is Senior Vice President, Specialist Advisory Services with Grant Thornton Limited and can be reached at mark.wentzell@ca.gt.com


Today’s Evolving Workforce - Globetrotting with The Right Job
MEMBER ON THE MOVE

According to the New Kelly Global Workforce Index (March 2011), almost 75% of Canadians are willing to move for the right job, with many willing to relocate to another country. The report found that the desire to move to a different continent is driven by the experience rather than setting up permanent residence, with 58% prepared to stay for up to three years or less.

Lori Danco RPR

Have you ever considered working on another continent immersed in another culture for a fixed period of time? What if that position was with a major Canadian institution that allowed you to travel back to Canada at more regular intervals?

IPM Associations recently approached Lori Danco, RPR, HR Officer at the University of Calgary-Qatar and member of the Association of Professional Recruiters of Canada, who splits her time between Calgary and the State of Qatar. Lori shares some valuable insights about the University of Calgary program and life in Qatar.

MQ: What is your role in Qatar?

LD: As HR Officer at the University of Calgary-Qatar (UCQ), I coordinate and administer operational aspects of UCQ human resources, and support and coordinate the recruiting function of UCQ, in compliance with the Comprehensive Agreement between the University of Calgary and the State of Qatar.

I provide HR support in the areas of workforce administration, benefits administration, taxation and residency issues, payroll, learning and development, health and wellness, PeopleSoft, job profiles for UCQ staff and faculty.

I also coordinate with the HR Office in Doha to support the recruitment function by assisting in all areas of recruitment and selection as required on the Calgary side. This includes liaison with many stakeholders on campus including senior administration, to help problem solve issues between the Calgary and Doha campuses.


MQ: What "perks" & benefits does the University of Calgary provide for Canadian workers abroad?

LD: UCQ provides Canadian employees with the adventure of a lifetime! Our Canadian employees get to experience everything that Qatar has to offer including diverse foods, customs and living environments.

Qatar has world class, modern shopping malls and old world markets. Qatar is central to a lot of fabulous vacation destinations. Many of our employees take regular trips to places such as Sri Lanka, Germany, France, Egypt, Thailand, Vietnam and other Middle East countries nearby.

In addition to furnished housing and a competitive compensation package, employees have the opportunity to work and live in a country and culture that is both contemporary and historic.

MQ: What are some of the challenges of living and working there?

LD: Summer weather is extremely hot and temperatures can reach 50 degrees at times. It becomes very much like how we escape the minus-50 degrees in Canada. We manage to find sport and recreation activities indoors to keep us active and healthy. Making a complete adjustment to a new country and culture can be somewhat daunting. UCQ has a tremendous support system for new employees and takes much into consideration when preparing new employees for their transition to Qatar living, including a comprehensive orientation program.

MQ: After having worked in Canada in the same role, what unique experiences doing the job have you had in Qatar?

LD: There is an ongoing balancing act between meeting the requirements of our main campus in Calgary while complying with the guiding principles of the State of Qatar. International HR entails building strong relationships and developing effective communication between our colleagues in Canada and our Qatari and International colleagues in Qatar. In order to provide highest service to our Qatari hosts, it is crucial to understand and respect the customs and culture of the State of Qatar.

MQ: How long are your work assignments?  Is there a rotation of staff?  Given the opportunity, would you like to go back again? What factors come into play making the decision to go back?

LD: UCQ offers a variety of work assignments. The majority of our contracts are two years after which time and upon mutual agreement, the contract can be renewed. I work in Qatar two or three times a year for up to three weeks at a time. Though UCQ has developed an excellent orientation program, there is nothing like first hand experience to broaden your global perspective. I have met some interesting people and made new friends there. Each trip brings new challenges and learning opportunities. I look forward to spending more time in working in Qatar. The major factors that I would consider in accepting an extended contract would be time away from my family and cultural adjustments.

MQ: How would you sum up your overall experience in your present role?

LD: My experience has been positive and motivating. Though some of the tasks are similar to what I would be doing as an HR Officer based in Canada, the experience of working with such a diverse international group has added a unique dimension to the role. The University of Calgary has offered me an excellent opportunity of globetrotting with a great job!

MQ Staff Writer

Reward and Recognition in a Transient Era
DESIGN PROGRAM WITH YOUR IT SPECIALISTS

As employers looking for top talent in a highly competitive era, we are faced with a transient labour force difficult to retain. Exit interviews supply us with a plethora of statements that often contain the word “better”, most commonly, “better job”. But what makes for a better job?

Kathy Follett-Lloyd, CMP On-Line Support Inc.

The answer to that question is a multitude of reasons, all personal to the individual across the table from you.

To an employee, recognition is a message that signifies they are appreciated and have been noticed by their employer. Therefore, a reward and recognition program that provides meaningful value to your employee will positively affect employee retention.

Begin by surveying your employees to gather salient feedback before any decisions are made around how you will recognize and what you will reward. Diversity, generational differences and our employees’ intrinsic motivators challenge us to make the best decisions we can. Don’t make the mistake of thinking you know what your employees want- ask them.

Secondly, engage your company’s programming specialist and build automation into your program to enhance effectiveness with employee recognition.

Employ the same programmers to build balanced scorecards for each department. The key to an effective program is to ensure that it is inclusive of all employees, specific to an action/behaviour/milestone, measurable and timely. Balanced scorecards meet those requirements and offer further opportunities for automation in the entire workflow.

Launch a loyalty based reward and recognition program that has two distinct sides: a “just because” side and an “accomplishment” side. The “just because” side is used to recognize such things as birthdays and work anniversaries as well as the birth of a child, marriage or loss of a loved one. While not all items are predictable, birthdays and anniversaries are and can be automated using your HR database to assist your People Managers.

The “accomplishment” side is where you will find significant opportunity to build automation into your rewards program. Metrics are tangible, defined and often already being measured in the work environment. Utilize what you already have in place by having your programmer build a conversion program that allows your metric tracking database and/or scorecards to feed your reward and recognition system.

Today’s employees are all about what is “next” and “what’s in it for me”. To keep up with this new generation, your program should be manageable, relevant and robust. Depending on the size of your organization, this may also require a corporate manager to ensure it works effectively and continues to develop at the rate your employees do.

At On-Line Support (OLS), our mantra is simple; Reward our people for their performance and their passion and we will be the employer of choice in our communities.

Kathy Follett-Lloyd, CMP is Vice President, HR at On-Line Support Inc. (OLS) in Charlottetown and can be reached at kathy.lloyd@onlinesupport.com