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Managing the Employee Factor through Cycles 197

Conventional wisdom is that the smaller the company, the
more apt owners are to work things out personally with
workers. “We recently reduced hours in our department,”
says Ben Atkinson, director of risk management for Edison,
N.J.-based Peoplelink Staffing, a provider of staffing, soft-
ware training, consulting, development, and support. “My
team proposed the idea, and each [of us] volunteered to
reduce [his or her] number of work days. I have asked other
managers across our enterprise to consider this approach.”

Atkinson says the move has prevented major disruptions
to projects, and retains the investment the company has
made in training its employees. “This is not to say we won’t
consider layoffs,” he adds. “But it depends on your eco-
nomic prognosis. If we anticipate a recovery sooner, we are
more likely to consider reduced hours. If we expect a long
slog, layoffs may seem more appropriate.”

Smaller private companies are more personal as all employ-
ees tend to know and have relationships with all other
employees (including the CEO). These companies also do
not have as much pressure to cut costs if the owner believes
it is possible to ride out the storm. Conversely, in a publicly
held company, even if a CEO is inclined to seek alternatives
to layoffs, pressure from shareholders and Wall Street ana-
lysts to cut staff might be too great.

In the past 20 years, staff cutbacks have more frequently
included attractive incentives, according to Daniel O’Meara,
a senior fellow at Wharton’s Human Resources Center and
an employment law attorney with Montgomery, McCracken,
Walker & Rhoads in Philadelphia. In the 1990s, O’Meara saw
more opportunities for voluntary retirement incentives. “It
was more feasible with a defined benefit plan, and very
feasible with overfunded pension plans. If [employers] could
afford it now, it might be that anyone with 20 years of
service and at least 55 [years old] would be treated as [if
they have] 30 years [of service] and … are 65.”