Cutting costs and saving jobs

Area employers are using creative approaches to keep workers on the job and avoid layoffs.

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As companies feel the pinch, it's likely the pressure to cut costs will continue. Until workers feel confident they'll have a job next week, it can be tough to make minor or major purchases.

"It's a vicious cycle," said Greg Bergman, Small Business Development Center director in Brainerd. "So that's why it's important people have confidence and optimism."

Wage freezes, pay cuts, discontinuing company contributions to 401(k) retirement plans, reduced weekly hours (from 40 to 32) and unpaid furloughs (for days each month or weeks during the year) have been a few of the options.

Bergman said in some cases businesses, most likely those owned by the same company, are actually trying to find ways to share employees. In that case, an employee may have reduced hours at both businesses but be able to maintain full-time employment between the two.

Sue Roberts operated a brake press Friday at Clow Stamping in Merrifield. Clow Stamping reported it saved about 44 jobs from being laid off through a program with the state that allows employees to make up some of their reduced weekly hours with unemployment benefits while they are able to keep their jobs. Brainerd Dispatch/Steve Kohls» Purchase reprints of this photo.

"That's probably the most unique thing I've heard of," Bergman said.

The state small business office is currently putting together a program on what employers can do to retain workers and survive until the economy gains steam.

"It's been a constant process trying to come up with new ways to help small companies," Bergman said. "The main thing now is getting through."

One option to retain workers who otherwise may lose their jobs is through the state's Shared Work Program. The economic slowdown meant Clow Stamping recently laid off employees and may have had to eliminate more jobs without the state program. At Clow Stamping, 223 employees are on the Shared Work Program.

Twyla Flaws, personnel manager at Clow Stamping, said the program saved about 44 full-time jobs.

The program has participating employees working 32 hours a week and taking one day off. The employee is then able to get unemployment for four of those hours. The program is flexible so employees may have short hours one week and then work a full week the next.

Clow Stamping reported the program allows the company to utilize employee hours in the most effective manner possible to get its product shipped and assist employees with income on the "short hours" weeks.

Clow Stamping's customers are waiting until the last minute to place orders and the company reported the Shared Work program allows it to utilize employees during hours they are most needed.

Before the holiday season last year, Clow Stamping also allowed employees to voluntarily take unpaid time off without having it affect their full-time employment status or benefits.

Some of the best ideas to save money may come from the front lines.

Crow Wing County employees came up with nearly 400 ideas to save money when asked for input as the county looked at difficult budget decisions. Tamra Laska, county human resources director, said staff members suggested a pay freeze and/or pay cuts in order to save jobs and benefit changes were made looking at ways to cut costs and create operational savings.

Laska said staff members are keenly aware of budget challenges and are actively participating in ways to solve problems and define a course for the future.

"Many staff suggested leave without pay and/or reduced hours as a cost-saving measure," Laska reported. "We are working through the process of assessing what level of participation can be accommodated on a voluntary basis without significant impacts on service. I do foresee us moving forward with this initiative as one of the tools we have to address the ongoing economic concerns."

MaryAnn Lindell, executive assistant at the Little Falls-based Initiative Foundation, said she felt fortunate to be employed with the foundation during this recession.

Lindell said the foundation's leadership team met with staff members and asked employees if they had ideas to save money. Staff members were asked to think about "new and different ways" they could accomplish goals. Lindell said ideas were as simple as turning off lights and equipment when workers were away from their desks for extended periods of time and using electronic mailings to reduce cost of printing, and re-thinking travel for meetings when conference calls may do.

They weren't jaw-dropping approaches, Lindell said, but the ideas potentially add up in savings and it brought workers in as part of the solution.

"This approach helps the staff feel empowered, rather than helpless and just watching from the sidelines," Lindell said.

RENEE RICHARDSON may be reached at renee.richardson@brainerddispatch.com or 855-5852.