Winning Workplaces Success Stories – RTC Industries, Inc.
Taking the tough questions – and decisions – to weather the economic storms
The questions have been coming hard and fast. Will we have more layoffs? What benefits will be suspended, or cut? What kind of new business is the sales force trying to drum up? Will we have summer hours this year? Why should I feel secure?
After a bumper couple of years in the late ‘90s, RTC Industries, Inc., a leading designer and manufacturer of in-store display units, has felt the downdraft of the recession and, particularly, the economic pressures on its retail clients. Over the past year, RTC has undergone three rounds of layoffs, totaling about 100 employees, and suspended benefits such as subsidized health club memberships and tuition reimbursement. Not surprisingly, employees are now nervous.
There’s a key lesson for any company that strives to become a winning workplace, even one with many of the key building blocks in place: smart people practices will not insulate a company from a tough economic climate and structural changes in its industry. The test is how the company responds. “People have felt very vulnerable,” says Richard Nathan, CEO of the $130 million, family-owned business, based in Rolling Meadows, IL. “Coming off a record couple of years, we had to regroup and guard against a loss of confidence.”
At RTC, with most of its 350 US employees in the Chicago area, the company redoubled its efforts to communicate openly, seeking to spread the word about developments in the industry and at RTC and to put to rest rumors before they became destabilizing. RTC also is seeking employee suggestions on cost cutting, helping to ensure that if there is pain to be shared, employees have been involved in the process.
Company-wide Town Hall meetings, presided over by Nathan, where employees are encouraged to ask questions directly or submit them anonymously, have become more frequent than their usual once-a-quarter pattern. Often, the large meetings are followed shortly after by informal, no-agenda luncheons with much smaller groups of employees and Nathan. And, in recent months, to try to further manage uncertainty and gauge morale, RTC has begun “associate feedback surveys” – one-on-one meetings between four different employees each week and human resources’ managers.
Many of the issues raised by employees center on their employment future and their benefits. And, for Nathan, being decisive, even-handed, and straightforward is crucial – especially, in explaining the decisions that lead to layoffs and suspension of accustomed benefits. “We’ve tried to be very open and explain that we are not cutting ‘core’ benefits,” says Nathan. Adds human resources director, Jean Carlson, “We are using the word ‘suspended,’ rather than the word ‘cut,’ very intentionally.”
RTC has drawn the line at benefits that touch the physical and mental well-being of its employees and help foster loyalty. For example, health care benefits remain intact. The annual, company-wide holiday lunch at the end of the year was preserved last year – but, costs were saved by moving it from a restaurant to RTC’s Chicago plant. And, RTC’s Employee Assistance Program, with its confidential, 24-hour hotline to an outside firm offering guidance on emotional, financial, and legal issues, seems sacrosanct in these times. In fact, laid-off employees are entitled to use the program for several weeks after leaving RTC.
Long-serving employees such as department sales manager, Anita Stayner, know that straight answers from management won’t, alone, turn an economy or a company around – but, she appreciates them nonetheless. “There’s not a lot of beating around the bush,” says Stayner, who has worked at RTC for 19 years. “Everyone kind of feels still grateful to have a job, and we’re willing to help the company work through the challenges.”
That kind of support, of course, is easier to hear than the tough questions. But, Nathan says that being open to whatever is on his employees’ minds is “part of our core belief structure.” With this foundation, RTC seems well placed to build for the future, once the economy cooperates.