The most severe fallout from the current economic recession is its toll on the workforce. When faced with the need to contain labor costs, an employer could resort to several different strategies, none mutually exclusive: layoffs, wage freezes, benefit reductions, or hiring freezes.
All these approaches demand sacrifice from the staff in the form of reduced income or heavier workload. Therefore, whatever strategy management chooses, communication, education, and accountability are critical to maintaining morale and financial stability. Proactive human resource systems, coupled with holding employees to high standards, and a “do the right thing” approach from management, will allow food co-ops to survive and thrive during economic challenges.
Build Systems for Success
According to CDS Consulting Co-op’s human resource training consultant, Carolee Colter, systems built on fairness, accountability, and transparency are the keys to succeeding during both boom and bust. “Now more than ever, people need to be efficient and high-performing. You’ll need the most teamwork-oriented, cooperative people who put out a strong effort.” Good human resource practices will allow retailers to identify and support the people crucial to your operation.
Colter believes that good human resources is first and foremost based on open communication. One important aspect of this in a recession is educating employees about the financial health of the business and giving them a real understanding of why every sale counts. “A lot of food co-op employees don’t think profitability is part of sustainability. They think of it in terms of higher values more than money, and that attitude is so common. Now is the time to address this front and center.”
This is especially important if the co-op is faced with having to make tough decisions like layoffs, pay freezes or cutting hours. Colter said that if you do have to make a change to pay or benefits it’s important to let people know that there’s a plan for how to address the problem and restore those benefits. “Keep it simple,” she said. “Use bullet points and key indicators that will give people an indication of when things can be restored. Give people the general path the plan will follow. Show non-management staff what managers are doing.”
“We may not have seen the worst of this recession yet, and we may be in it for the long haul. Managers will have to think long term,” Colter said. As part of looking ahead, she advises that the manager and management team consider making sacrifices first — and to communicate this with staff. Not only is it the right thing to do to show support for those who can least afford cuts, but to help minimize any perception of illogical or unfair actions that might seem to come down from on high. “One of my missions is to see the employee-management relationship as adult to adult, versus parent to child.”
Colter thinks that applying fair values with honest communication about workplace issues is the place to start changing that dynamic.
Ozark Natural Foods’ Experience
Alysen Land, general manager of Ozark Natural Foods in Fayetteville, Ark., has seen her co-op come full circle in the past decade. Ozark went from a deeply divided workplace with the co-op on the verge of failure, to a cooperative model of success with a very bright future. Land took over management duties in 2001 after an expansion in which nobody was prepared for the change from a 1,200 square foot store to one 9,000 square feet. To stop the huge financial losses Land made many hard decisions, including layoffs, cutting health care coverage, and discontinuing staff discounts.
“Initially there was a lot of anger,” she said about the rebuilding process. “I was handling problems,” Land said, “but not the communication. I had to get better at that.” Colter showed her how certain personnel habits and procedures were contributing to the downward spiral. With Colter’s assistance, she was able to create improved HR systems: There would “be no secrets,” they’d “mark things off a visible to-do list,” and “get people to talk to each other,” Land said.
Land credits Colter’s advice during a tough time as one of the reasons they are thriving today. “Carolee’s work is benefitting us even now. We have great potential and a really exciting future — even in a recession — I have great plans 3, 5, 10 years out.”
Ozark’s current position is due to their willingness to take leadership on challenging human resource issues. Like Ozark, food co-ops will also continue to thrive during the recession, and Colter thinks this is also a good opportunity to consider ways for the co-op to strengthen their commitment to the seventh co-op principle, concern for community. “There is no better way to support the local economy than through our employees. Being able to pay them well enough is good for everybody. The livable wage model helps give co-ops a tool on how to arrive at it,” she said.
Not only that, how you treat job applicants is important. It is not unheard of nowadays for a food co-op to get dozens of applicants, if not more, for every job opening. Colter’s advice to HR managers and others is to treat those people as well as you can, demonstrating the co-op’s commitment to its values through common courtesy. “The applicants are in your community, and they are probably your customers or possible customers in the future. For that reason, it is cost-effective to call them when you can’t hire them. Usually people are happy to get word back and it shows them how you function in the community.”