Managing preferred employer reputation essential
I recently was asked to moderate a forum on “Managing Reputational Risks.”
Perhaps like you, my first reaction to the request was, “Managing what?” But Google it. It’s a thing. There have been books written about it, magazines devoted to it, careers specializing in it and websites galore focusing on the subject of managing reputational risks.
The forum was presented by the Wisconsin Institute of Certified Public Accountants.
According to the panelists, one aspect of the subject is becoming increasingly important: managing an organization’s reputation as a preferred employer.
According to the U.S. Department of Labor, job openings rose 1.6% in January to a seasonally adjusted 5.6 million. Meanwhile, more than 3.2 million people quit their jobs in January, the most in nearly 16 years.
In the most recent employer survey by QPS Employment Group, a Brookfield-based staffing company, 63% of the companies responding have open positions they are trying to fill.
The bottom line: Talented employees are becoming more mobile.
According to WICPA panelist Karl Robe, founder and principal of Karl James & Co. LLC in Waukesha, one of the most effective, but overlooked, tools for an employer to manage its reputational risk is its existing workforce.
“One largely untapped reputation building resource are employees. Research shows employees are your most credible sources of company information for outside stakeholders,” said Robe, a public relations consultant. “This includes talent, which in Wisconsin, is the leading concern for most employers. Your reputation in a tight labor market will determine whether you get the best and the brightest or the dregs.
“How employees portray your company depends on culture. Culture depends on leadership. Leadership depends on trust. Reputation and trust are inextricably linked. Whatever your agenda, employees will play a significant role,” Robe said. “Reputation evolves at the intersection of business, society and politics. It takes a lifetime to build and a nanosecond to destroy.”
Robe said Milwaukee-based Rexnord Corp. appears to be in the midst of such a nanosecond. The company is following through with its plans to close its ball bearings manufacturing plant in Indianapolis and send 350 jobs to Mexico.
The outgoing employees can gain severance pay if they agree to train the Mexican counterparts who will take their jobs for pesos on the dollar.
It’s not unlike asking the Indianapolis workers to build their own career coffins.
“I’m scared to death,” John Feltn--
er, a Rexnord machinist, told the Indianapolis Star . “It’s tough.”
Rexnord expects to save $15.5 million during its first full year after moving the Indianapolis operations to Mexico, Chuck Jones, president of United Steelworkers Local 1999, which represents Rexnord employees, told the Star, citing company figures shared with the union. Indianapolis employees would have had to cut their pay from an average of $25 an hour to about $5 an hour to compete, Jones said.
“The law don’t allow that,” Jones said. “Our people wouldn’t work for that wage, either.”
Rexnord’s plans prompted President Donald Trump to tweet, “Rexnord of Indiana is moving to Mexico and rather viciously firing all of its 300 workers. This is happening all over our country. No more!”
For weeks, Rexnord declined to comment about the news as it drew national headlines … until last week. A company spokeswoman provided the following statement to the Journal Sentinel: “Together with the local Steelworkers Union, we reached a mutual and final agreement regarding the relocation of our Indianapolis manufacturing operations in late 2016. While some of the Indianapolis positions are being relocated to our existing facility in Mexico, we are also retaining general office positions in Indianapolis and creating new jobs in Texas … This has been a very difficult decision and we understand its impact on our associates, their families and the Indianapolis community. We are providing support and transition services for our impacted associates during this difficult time … We have been manufacturing products in America for 125 years, and our U.S. operations continue to be home to approximately 4,000 associates — more than half our global workforce. Difficult decisions are a part of today’s business environment. To be a viable company that contributes to economic growth, we must meet customers’ needs with high-quality products at competitive prices. We work diligently to do this while making responsible decisions for the people and partners who depend on this company and its long-term health.”
What do you think? Is Rexnord successfully managing its reputational risks?