Expert Perspective from Grahall’s OmniMedia Editorial Board
The economic downturn has done more than put people out of work. It has put extreme pressure on some of those still holding jobs to do more and more. This past summer has been a lesson for some companies under stringent workforce limitations to continue to provide service and products while at the same time providing often overworked employees with much needed and well earned vacations.
The US Department of Labor confirms that “The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee’s representative).” But most companies, even very small companies, have vacation policies in place that provide paid time off.
These policies can cause dissatisfaction when companies and employees focus only on how much time is allotted for vacation and not on how the time off is approved. Problems also arise when there is a formal vacation policy that determines the amount of time off that is available, but the process for requesting and approving time off is informal.
The August 30, 2010 article by Joe Walker published in the Wall Street Journal, Summer Vacations Bring Strain to Trimmed Staffs, got our editorial board thinking about vacation policies and the importance of leadership capability in terms of managing scarce resources.
Summer is the traditional vacation time and for companies whose clients and customers are also taking vacations there might not be much conflict (professional services might be an example). But for other companies or other jobs the fact that customers and clients are on vacation might require that staff be on duty (utilities, cable TV services and large machinery maintenance services might be some examples).
Grahall’s Joe Davidson says: “Developing an elegant and effective vacation or paid time off policy requires having a good handle on workforce planning, analytics and staffing requirements.” Joe adds that the policies must be “competitive, but more important is that people can actually take the time off without impacting the business.”
The economic downturn as requires that companies cut cost – in some cases to remain competitive and in other cases to remain in business. Often one of the early victims in cost reduction is training, and even more so, cross-training to address temporary staff shortages.
Grahall’s Michael Graham observes that “Leaders, executive and business owners can create great plans and hire good people but the real differentiator is their ability to allocate scarce resources among competing needs.” The best businesses are run by great leaders who can do this well because their businesses will be run in an efficient manner.
For large companies and perhaps small ones as well, leaders, owners and/or executives need to start their effort of allocating scare resources – in this context that would be workers – by identifying the key jobs in the company, and the key people in those jobs.
As Michael Graham said in his July 2009 blog Sameness is the mother of disgust (and loss of talent): “… you need to do a careful analysis to determine who really is important to your organization. Who are those people who drive the successful delivery of your business strategy? If your company is a cost leader, then executives in procurement might be key (think Walmart). If your company is an innovator (think any pharmaceutical company), then perhaps the R&D executives are key.”
These individuals and those in their departments may be critical all year long. Training, cross-training and careful consideration around vacation policies and approvals are critical to ensure that these key areas of the company continue to support the business strategy.
Well at least there is plenty of time to plan and review before next summer’s vacation demands are upon you!
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