By Ian J. Cook, CHRP

Most organizations that cut staff, reduce pay and reduce benefits would expect to see their staff engagement drop. Whistler Blackcomb had to take these tough actions to survive an array of economic challenges over the past three years – and yet morale has never been better. In fact, the way they handled these steps actually led to an increase in staff engagement and an enhancement in customer service.

We spent a day with Joel Chevalier, director of employee experience for Whistler Blackcomb, to find the powerful and enduring lessons learned from their experience. Dealing with tough economic realities while enhancing their connection to their staff.

Tough Times

The recession of 2008 was cruel to many organizations. As a destination ski resort, Whistler Blackcomb knew it would be impacted. At the start of the recession, they did not know quite how tough things would become.  Initial projections led to  a reduction in  headcount of  60+ positions. Things did not get any easier  and further costs savings became necessary. Whistler Blackcomb reduced salaries by approximately 3 per cent and took away a further 2.5 per cent from the RRSP contributions paid to staff; they also introduced a week of unpaid leave for most staff. These reductions did not happen in one go, but came in waves four to six weeks apart. None of these takeaways has yet been put back into staff compensation.

And yet, this IS a good news story.

On the positive side, since 2008, employee satisfaction has increased by over 13%, customers’ ratings of employee service has increased by over 11 per cent and Whistler Blackcomb’s already high Net Promoter Score has increased by 6 per cent. These would be stand out results for an organization in good times. Coming on the back of three tough years and a series of reductions in staff and staff compensation, they are even more remarkable.

Just how Chevalier and the executive team at Whistler Blackcomb managed to achieve these numbers provides valuable lessons in terms of effective practices and the ways in which HR can contribute to organizational strategy.

For starters, Employee Experience (HR) is key at Whistler Blackcomb. Chevalier sits as an equal at the executive table and describes his role as facilitating good people decisions rather than driving a specific HR agenda. What this means is that all people decisions belong to the executive team and therefore HR has strong support. Moreover, the Employee Experience (HR) team sees their purpose as enabling the business to thrive through the people. This business-focused approach has led to a deep level of trust between both HR and the executive, as well as between HR and the employees. This type of foundation is not quick or easy to build and proved a vital component in the outcomes achieved.

Focus on Strategy

There is substantial research around the impact of forced layoffs – all of which indicates that reducing staff in order to save money does not work. While cost savings may be required, there are several practices that need to be put in place to mitigate the downside of forced layoffs. One of the key practices identified is tying a reduction in staff to a shift in strategy and involving staff in understanding how they bring the new strategy to life.

The way in which the staff reductions were introduced at Whistler Blackcomb followed this practice. There was a high degree of transparency around the economic impacts to the organization and a strong message that the purpose behind any and all the changes was about protecting the unique experience of visiting the resort. Each communication was clear about the realities of their situation and involved letting staff know what they could do to help the situation improve.

This strategic focus was consistent throughout the process of staff take-aways. It was the reason that the organization switched from reducing headcount to reducing salary budget. They recognized that they could not reduce staff any further without doing damage to the experience of visiting the resort. They also recognized that once people had left Whistler it would not be easy to bring them back. So they switched to spreading the pain of reductions across as many people as possible to reduce the impact and they also took the stance that those who were least well compensated at the start would experience the least reductions. This meant that every time a  new take-away was announced the message came from the President and that he could openly say that he and his executive were taking the same…if not, a bigger cut to their compensation than anyone else in the organization.

Doing it right

The research on this topic highlights “procedural fairness” as a key strategy in reducing the negative impacts. What this means in practice is that all staff understand and recognize that the process for the decisions, the way they are introduced and supported is fair and that they are involved in understanding how “fairness” was achieved. Within the context of this situation this means being open about the layoffs, providing transition or outplacement support to those affected, providing advice about how to act to those who were not affected, being open about the impacts on all staff and taking a leadership position that demonstrates the executive is being affected too.

There is no one magic phrase or action which creates this understanding. It is developed through consistent and clear communication on both formal and informal levels. Getting this right is very powerful and not easy to do. Success for Whistler Blackcomb has stemmed from many hours of work put into crafting, supporting and delivering effective communication, as well as the full support and involvement of the executive team.

The recession of 2008 caused a lot of change and brought a lot of challenges. Learning from those who have thrived through the challenges enhances our capacity for next time. The lessons from this crisis are well summed up by the words of Joel Chevalier “We cannot control the economy and we cannot control our customers. The one thing we can affect is how our people feel about working here and we want them to be as excited as we are.”    This singular focus and its application through tough times enabled Whistler Blackcomb to make significant reductions to staff and staff compensation at the same time as they increased staff engagement and customer satisfaction.

A global citizen, Ian J. Cook, MA, MBA, CHRP (ijcook@bchrma.org) has chosen to make his home in Vancouver where he heads the growth of BC HRMA’s research and learning services. 

(PeopleTalk Fall 2011)