Recession calls up sacrifices

Employers want to keep good workers, who want to keep their paychecks

A year into a global recession, businesses across the economic spectrum are trying to avoid layoffs -- or prevent more -- by down-shifting operations. They are reducing hours, freezing wages and suspending matching 401(k) programs.

They're also asking employees to make other, seemingly smaller, sacrifices for the collective good: downsizing client dinners to business lunches, replacing catered meetings with brownbag teleconferences, cleaning offices less often.

Grateful to have a steady job, many employees are embracing conditions that they might have sneered at only a year ago.

"It's not that horrible," said Krystal Daniels, 24, a cashier at Rush Hour Karting in Garner, whose duties now include cleaning the public bathrooms at night. "It's better than shutting down."

Employees, especially those who have survived a layoff or two, will surprise themselves by how much they are willing to put up with, said Ben Rosen, a management professor at UNC Chapel Hill's Kenan-Flagler Business School. "We're at such a difficult employment time that people don't have the options they had even three months ago, so the tolerance for sacrifice is far greater," Rosen said.

But such policies can hurt morale, Rosen said, particularly if managers and executives don't lead by example and give up a few perks.

"Even when people are hurt, if they think the policies are fair, they can live with it," he said. "If an employee thinks he's making a sacrifice but the top managers are still going on retreats to Florida in the middle of winter, then it won't seem fair."

Employees in the Triangle, a region often held up as a national economic bright spot, have been chastened by waves of layoffs that have claimed thousands of local workers recently. Unemployment for the state in November was 7.9 percent, the highest in a quarter century. The November rate for the Triangle is out today and is expected to rise from October's 5.5 percent.

Job cuts not simple

Slashing jobs is often the easiest way to solve cash-flow problems because salaries and benefits devour the bulk of a company's budget. A national survey of 117 companies last month by consulting firm Watson Wyatt Worldwide found that more than one in five companies planned to lay off workers in the next 12 months. The number of companies with hiring freezes rose from 30 percent in October to 47 percent in December.

But many companies are reluctant to make such cuts immediately -- worried that it will take them too long to expand when the economy turns around. Others, watching the economy spiral down, have hired selectively and are now reluctant to pare those they consider among their most productive.

"Laying off employees is an extreme measure, really a last resort," said Progress Energy spokesman Mike Hughes. "In every case, it's a balancing act. We have to be able to ensure the same high level of service and reliability that our customers and regulators expect, even as we're reducing costs."

Other cutbacks

The Raleigh electric utility has cut 300 positions in Florida but has made no large scale cuts in North Carolina. It has, however, cut travel by one-third at its corporate service company and stopped catering lunches for many departmental meetings.

Martin Marietta Materials, the Raleigh company that supplies gravel and crushed rock to the construction industry, let go more than 300 workers in the first nine months of last year. But to limit further damage, managers have trimmed work schedules, cut back plant operations and cut worker overtime.

Other companies, such as Caterpillar, are doing temporary layoffs and mothballing plants to cut operating costs. Cisco Systems, the global information technology company with offices in Research Triangle Park, shut down its operations in the United States and Canada from Dec. 29 to Jan. 2 to save money.