Small Business Builder: Treating Employees Right

Almost 5,000 Colorado companies (averaging 20 employees each) eliminated health insurance coverage during 2001, after steady premium increases over the last five years of 20 to 100 percent, the Colorado Division of Insurance reported in late April. Many small companies that have retained employee coverage have done so by raising employee premiums and deductibles.

Employees understand problems such as rising health-insurance premiums and business slowdowns, as long as they're kept in the loop. Workers whose benefits are cut don't blame their employers … as long as employers clearly explain the company's financial position and tie reinstatement of benefits to specific improvement measures. If management is forced to cut benefits or cut jobs, employees gladly opt for temporary cuts … especially if the company has been forthright and if employees see managers making sacrifices as well.

Just Rewards

The my-way-or-the-highway folks will get their comeuppance.

Though the economic recovery is gradual, and though the unemployment rate might reach 6.5 percent this summer before it starts to drop, most experts believe the labor market is going to get a lot tighter. Companies that have held on to their talented employees will be spared the expense of screening, hiring, and training new people as business picks up. (Many companies might find it more cost-effective to pay re-employment bonuses to former workers than to hire new workers.)

Economists look for a return to 4 percent unemployment. Labor shortages will reappear, exacerbated by baby-boomer retirements. As jobs open up, companies that have failed to nurture their employees through tough times will see high turnover. Good managers in healthy companies with well-informed, well-balanced employees will reap the rewards of their enlightened policies.

This is Mary Campbell's final Small Business Builder column for ABCNEWS.com. You can reach her atsmallbiz@gravity.biz

An editor since the age of 6, when she returned a love letter with corrections marked in red, Mary Campbell founded Zero Gravity in 1984 to provide writing, editing, marketing and other services to small businesses. Her presentations and workshops address small-business topics from Web sites to business writing. An editor of and contributor to dozens of publications (books, journals and newsletters), she is co-author — with her sister, Pipi Campbell Peterson — of the second edition of Ready, Set, Organize! A Workbook for the Organizationally Challenged (JIST Publishing, 2001). Please e-mail her your comments, questions and suggestions at smallbiz@zgravity.biz. Small Business Builder is published every other Wednesday.