AT A CORPORATE brainstorming retreat held this past November, Greenwood Village, Colo.-based Laramar Group managers and executives went through a drill. They assumed that revenue in 2009 would be flat and were charged with cutting expenses to improve annual net operating income by 4 percent to 6 percent. Naturally, many turned first to the huge personnel line item, but the exercise ultimately showed that alternatives to layoffs can be discovered if management takes some initiative to get creative.
“It is a scary time for a lot of people, but you have to look at it as a time of opportunity,” advises Laramar's managing partner and CEO, Dave Woodward. “For instance, we have enough assets where we can start increasing responsibilities across multiple properties. We are also looking at potentially closing [on-site leasing offices] a day or two during the week so we can be open on Saturday and Sunday. Who says you can't be closed on a Tuesday or Wednesday or Thursday?”
Indeed, 2009 is no time for the corner office to stop thinking outside of the box when it comes to discovering ways to retain quality staff in the face of decreasing revenues. “Certainly the economy is in rough shape and problems are accelerating, including the loss of 1.2 million jobs in the first 10 months of 2008—and more than half of those losses were in the last quarter,” says John Challenger, CEO of Chicago-based human resources and outsourcing consultancy Challenger Gray and Christmas. “But, there are steps you can take—from telecom-muting to sabbaticals—and you can always look to cut costs in other ways—perhaps in real estate or in travel—that might alleviate the need for layoffs.”
Most of all, don't spring dire announcements on an already cagey employee base. Houston-based REIT Camden Property Trust held two all-hands-on-deck conference calls in 2008 to discuss difficulty in the financial markets and a decision to reduce head count through attrition. “Communicate the facts, whether you like them or not,” says Camden president Keith Oden. “When people don't feel like they are getting the full picture, it is the uncertainty that becomes the killer.”
If, ultimately, you have to cut, cut wisely. Look for the highest-paying jobs with the lowest amount of productivity and contribution. “Be smart about who you choose,” Challenger advises. “You'd like to cut into the fat before you cut into the muscle.”
CAMDEN PROPERTY TRUST
As one of Fortune magazine's 100 Best Companies to Work For in 2007, Houston-based Camden Property Trust sticks with tried-and-true tactics. That includes continuing to host its annual leadership conference, which brings the firm's top talent to Texas for a multi-day brainstorming event. This year's theme: “What if? New ways to think about the things that we do today.”
The conference taps into the creativity of Camden employees—and everyone has a good time, too. “One of your values must be to have fun—even in tumultuous times,” says president Keith Oden. “Wall Street analysts think we should set aside the [conference] money and raise our dividend. They can't seem to understand the environment.”