Employers are beginning to brace for the possibility of a recession. While focusing on the bottom-line, the first reaction may be to "cut headcount," a disparaging phrase often uttered by those whose heads are rarely counted. Reducing labor costs may generate short term relief. But if we learned anything while recovering from the dot-com bust, it is that the cost to replace, train, and make productive replacement workers far exceeds any initial savings by cutting labor. Layoffs devastate a workforce-even to the organization's survivors. Any efforts made to build a skilled, engaged workforce in an era of labor scarcity will rapidly go down the drain with your first separation. Employers must explore all other options before they begin reducing their workforce.

A Bain & Company study titled "Debunking Layoff Myths" found no evidence that layoffs improved long- term financial performance. In fact, it takes between 12-18 months before any financial benefits of layoffs kick in because of severance costs and the negative effects on survivor productivity. And, when the economy turns around, employers are then faced with huge costs in hiring and training a new workforce--a task made more difficult by the negative impact on the company's reputation for the layoffs. Often, downsizing, as part of a recession survival strategy, can do more to cripple your business than the economic downturn itself.

New FMLA Coverage

On Monday, January 28, 2008, the President signed into law the first expansion of the Family and Medical Leave Act (FMLA). The National Defense Authorization Act provides additional FMLA leave for military families. Specifically, the bill adds two new FMLA-qualifying events, expanding FMLA to include employees caring for an injured service member as well as family members who have a family member called to active duty.

Under the new law, FMLA-eligible employees will now be entitled family leave due to a call to active duty and caregiver leave for an injured service member. Most of the provisions of the FMLA remain unchanged and will apply to these new types of FMLA leave, including employer coverage, employee eligibility requirements, health insurance continuation, and reinstatement rights.

Employers should include this leave information in their employee handbooks and their policy manuals.

OSHA 300-A Posting Deadline

Beginning February 1 of each year, covered employers with 10 or more employees must post the OSHA-required Form 300A, which summarizes an employer's reportable injuries and illnesses for the prior year. The Form 300-A posting period is February 1- April 30. An employer subject to this requirement must post the OSHA Form 300-A even if the employer had no reportable injuries/illnesses in the prior year. In addition to the posting requirement, employees with no fixed work site or no access to posted sites must be provided with a copy of the report.

Call the HR HelpLine (800-892-9828) with your questions.

I will be speaking on March 19 at the 2008 Public Utility Management Program offered through the Northeast Public Power Association. I will be addressing "Critical Workforce Issues Impacting Employers."

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