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Cutting Costs Without Cutting Engagement

By Richard Kern

Employees work for more than money – they work to get training and career development, to make a valuable contribution and because they enjoy contributing to a common vision and making their place of work a better place to be.

Today, businesses everywhere are being asked to do more with less. In this environment, loyal, motivated employees and partners are critical to continued success and profitability. And companies know it: Hay Group’s recent Reward in a Downturn survey in just one of many showing that engagement is the top concern of employers right now.

“The discretionary effort of employees willing to ‘go the extra mile’ is even more critical for surviving the downturn and being positioned to grow once the environment is more favorable,” notes the report. “Similarly, organizations are concerned about retaining their high performers in order to get through the downturn and take full advantage of the upturn when it comes. However, employers can’t afford to pay more on reward.”

And that’s not the only place they’re cutting back. Here are the top five actions companies are taking to reduce costs:

As you might imagine, budgets for incentive and reward programs are also under scrutiny these days, but there are a lot of ways to foster and maintain engagement that don’t cost a penny. The report rightly notes that employees work for more than money – “they work to get training and career development, to make a valuable contribution and because they enjoy contributing to a common vision and making their place of work a better place to be. Leading organizations understand this and are focusing on improving non-financial aspects of reward.” And concentrating on the non-financial aspects now will put you in a better position to implement more traditional incentive programs once things improve.

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Preserve and Build

Hay Group experts suggest several ways to preserve – and even build – employee engagement while still making targeted cuts in the abovementioned areas. Here are a few that those of us in the engagement business should be focused on and familiar with:

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And Finally…

Aside from the specific suggestions outlined above:

Portions excerpted from ‘Cutting Costs – Without  Cutting Engagement’ by Hay Group. ©2009. For a copy of the full, 24-page report, Reward in a Downturn. Go to www.haygroup.com and click on ‘Download Center.’

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