Budget cuts are difficult and sometimes, no matter what the resolve, they’re inevitable. But what happens when financials are drastically downsized ?
This scenario isn’t difficult to picture. Budget cuts seen through layoffs, salary reductions, resource eliminations, benefit changes and many more can really impact an establishment and all the moving parts therein. Whether you’ve had personal experience with this or not, you surely have heard and/or seen what these changes can do to stakeholders.
In early August, news wide coverage on the Muncie school district cluttered the air waves. Due to immense budget cuts, the school district opted to change transportation companies to help off-set the $11.5 million dollar deficit. Unfortunately, what they found on the first day of school was anything but good. Buses were extremely late picking up students while some never made it to the stops at all. Bus drivers didn’t have correct route information and turned to students to give directions. And all the while, parents were left in the dark wondering why the transportation system was totally out of whack. In one news report on RTV6, a parent recounted the ordeal she was put through:
“We hardly knew anything walking into school,” said parent Jessica Morrow. “It’s just really not an environment I want my kids in. We really considered pulling them out of the school system this year, or home school.”
Morrow and other parents expressed frustration with the district’s new busing system, which includes a new busing company Auxilio.
“We waited until 7:20 and they never showed up and school starts at 7:10 so I ended up going back home and bringing the kids to school,” said Morrow. “They couldn’t tell me what bus she’s riding and then they told me to contact the day care, then they told me to contact the school, and the school said they don’t know.”
Turns out, after one day of school, Muncie had to close, district-wide, for the next two days in order to sort out the utter mess. This disaster was preceded by other drastic cuts and problems for Muncie. Back in March, teachers and parents were outraged at the new proposal to reduce teaching salaries to help in budget costs:
Teachers and parents protested Tuesday night against a proposal to cut teacher salaries as a way for Muncie Community Schools to dig out of a $11.5 million budget shortfall.
There would be a 20 percent salary decrease this year for teachers and a ten percent retroactive decrease going back as far as 2015.
One teacher who’s been with the school district for 26 years says she would be making about $21,000 a year.
It’s undeniable: balancing budgets and staying fiscally sound is a hard job and one that takes a lot of knowledge, strategy and finesse. Yet no matter how you slice it, budget cuts drastically affect everyone. Perhaps though there are ways to help lead toward commonality when making the tough, painful decisions.
One of the worst things that came from the Muncie bus disaster was the fact that little was communicated to the parents. Perhaps if the school district prepared families for the fact that the transportation system would be a bit haywire in the beginning, they would have been a tad more understanding with the first day (week / month) of school. Instead, the district sent people running in frantic circles and cancelled school the first week it was in session.
- Tip: Overcommunicate—even if it seems like overkill. Make phone calls. Send emails and text alerts. Mail letters. Have a Town Hall meeting. When it comes to something as important as our kids and/or our jobs, every avenue should be taken to provide ample information.
When new products, procedures and/or systems are being integrated, a valuable step in the process is to critically assess the changes (both positive and negative) that will potentially occur. By looking ahead and preparing for potential side-effects, you are placing your company at a great advantage. Knowing and understanding that complications may come into play is essential to trouble-shooting without having to worry about massive damage control.
- Tip: Don’t hesitate to acknowledge any harmful problems that could arise. Optimistically, changes will go as planned. But, it’s vital to recognize and plan for the worst case scenario. Better to be prepared than blindsided.
Advocate and Support
When it comes to budget cuts, layoffs happen quite readily. More often than not, those who lose their jobs happen to be new-hires and under-performers. And while no employee should be looked at as “expendable”, it’s easier perhaps to release those who don’t have the years or track record behind their work. On the other hand, salary and benefit reductions should be seen as a last resort because this solution puts enormous strain on employee morale. For those who haven’t lost their job, you can surely bet they’ll be looking for a new one if they feel they are expendable, unappreciated and/or under-valued.
- Tip: Be open to alternatives. If there is no way around it and salaries must be reduced, find alternate ways to compensate your dedicated employees. Consider education reimbursement programs, improve 401(k) matching, offer scholarship opportunities, provide continuing education seminars. If you’re in doubt of what would keep employees happy, ask them. Allow their opinions and suggestions to have some consideration. No matter what, be a strong advocate and supporter of your employees. Without them, a chance for a rebound is dire.