Last week, I continued my series on Zayo Group’s 2009 Priorities and posted 2009 #2 Priority: Zayo becoming a “Best Place to Work”. In that write-up, I focused on an essential precondition to becoming a “Best Place to Work”–having satisfied customers. When customers are treated well, employees feel better about themselves and their company. Though important, happy customers is only a prerequisite to having a great work environment.
Financial remuneration is another prerequisite. In a “Best Place to Work” company, employees must believe they are compensated fairly, both relative to their co-workers and their industry peers. They also must believe they will benefit financially (in an appropriate way) if their company does well.
We are in a difficult financial environment. Job security is more important today than perhaps any other time in most of our careers. Given the circumstances, many companies have little choice but to RIF employees, freeze or even reduce salaries, and eliminate bonuses. When circumstances require such actions, executives must be prepared to take them. Even companies that are considered “Best Places to Work” will be taking these actions in this environment. If the situations call for it, Zayo will take them as well.
Even in an healthy environment, I will push my management to always probe to see if our staffing and compensation is appropriate, where appropriate means not too high and not too low. “Too high” might feel good at the time for employees, but more times than not this leads to disruptions down the road. Either a bow wave builds up and large RIFs happen down the road, or a company’s EBITDA results are low and they become a takeover target.
For now, Zayo appears to be staffed appropriately and, for the most part, compensation levels seem right. This could change if the recession persists but, as of the time of this writing, most (but not necessarily all) jobs are secure. Though I hope it is unnecessary to say it, the downturn requires that each and every employee work hard and smart so that our financial security remains high.
Zayo is continuing to maintain its quarterly bonus program. In this difficult economic environment, it will be harder to achieve the higher payout levels, but my hope is that we are able to continue to set targets that are attainable and that we deliver results that lead to bonus payouts during this tough period.
We want our employees to see themselves as owners of the business–and giving them a slice of the value we create is an important part of this. Therefore, over time Zayo will gradually increase the number of employees that participate in its management equity program. How do we determine whether an employee should receive equity? We look for those employees who, over a period of time, are making significant contributions–above and beyond the normal expectations of their position–to creating value for our stakeholders.
To recap, Zayo’s second 2009 goal is to be viewed by its employees as a “Best Place to Work”. The first two steps are to provide great service to our customers and to compensate employees fairly, including providing them ways to share financially when the business does well. In these times, job security is of added importance. Using Maslow’s Hierachy of Needs, what we discussed so far is in the bottom layers of the pyramid. In a subsequent post, we will discuss other factors.
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In response to your “best place to work” post, I wanted to weigh in with what else is important to me. In these uncertain economic times, I appreciate you’re getting ahead of my panic/concern. After all, I have 3 kids to feed, clothe, etc.. Immediately following ICG’s bankruptcy in 2000, I watched thousands of people walk out , after being laid off, feeling angry and betrayed because they had only been told for months how incredible the company’s meteoric rise was and how important their contribution was . Most of them, quickly found new employment, at comparable salary, and that chapter was over. I don’t think any of us feel good about that in today’s economy. Until you, Sandi, John, and Rob, came to ICG, the only way we knew to control cost was to lay off employees. In the past, my rebellious side wouldn’t let me pay too much attention when the “big shots” told us how great things were. Today, my ears perk up when I hear you or John say things like “cash flow positive” or “good or bad sales month” or “our net install numbers are”. I feel I get the straight talk about the health of the company. I appreciate the position that you have put us/Zayo in and I feel I am in the best position possible to ride out this storm. Who knows…? This economy may be the beginning of a great success story for the country and for Zayo.
thanks wes for taking the time to write this and share your thoughts. my objective is to present the facts–good or bad–so that all employees can sort through their own future. In bleak or difficult periods, we are more likely to fight our way through if everyone believes they are being given the straight scoop.