Managing Human Capital during a Downturned Economy

1. Managing Human Capital during a Downturned Economy Lunch & Learn Marie Guillot, Silver Fox Associate President, ABACO International Lane Sloan, Silver Fox Advisor Energy Industry Leader

2. What is your course of action? Strategic Options Downsize Retain Grow Implementation Select Viable Options Thoughtful Methodology Opportunistic Recruiting Process Two Key Elements Staff Engagement Transformation Steps Management

3. Thoughtful Methodology:Why are you downsizing? Focus on high grading staff Want to be Lean & Mean Performance Criteria Focus on sustaining operations Experience Criteria Have to… cash short Downsizing Reasons Performance Criteria Orderly closing down No choice in liquidation Timing Criteria

4. Lean & Mean: Target C Performers Review with Lawyer Staff Skill Pool A A B A B B C C C Inexperienced Staff Experienced Staff Retirement Ready

5. Major downsizing: Experience Factor Review with Lawyer Staff Skill Pool A Target RED A B B A B B C C C Inexperienced Staff Experienced Staff Retirement Ready

6. Voluntary vs. Involuntary • Lack of sufficient objective performance data • Litigation considerations • Morale factor • Deep enough pockets for severance program • Potential for deep cuts

7. Face brutal facts and give hope for future How to Manage:Two Key Elements Leaving Staying • Severance Methodology • Announcement Process • Severance Package • Outplacement Support • Counseling • Dealing Fairly • High leadership visibility • Extensive communications • Manage Mourning Period • Create a vision for future • Improve operational processes • Engage staff in change

8. How to Retain Staff:Make tough choices People are your most important asset! Some Possible Options • Work harder/longer hours same pay • Hiring freeze • Reduced time or overtime • Salary freeze or reductions • Cut variable expenses

9. retain your Human assets:Engage Your people Doing the right thing • Communicate employees most important asset • Lead by action • Engage staff in making tough choices • Initiate change improvement process • Provide rewards for cost savings • Rally employees we can do it

10. Growing Company:Opportunistic Recruiting Pay market rates for Right talent Downsized Candidates on street Young Bs Look for Potential Acquiring the Right top talent Defunct company Candidates on street As & Bs Shakers / Movers Downsized Disgruntled candidates Recruit Away As & Bs Experienced

11. Grow Company:Transformation Steps Start with blank sheet Start with growth plans Develop organizational needs Define jobs to fit needs Utilize good search methods Establish positioning and target market Follow recruiting process Focus on screening candidates Choose right fit Consider retention process

12. Managing the Human Asset, anytime Leadership is about coping with change Management brings order to achieving goals Leadership Activities Management Activities Planning & Budgeting Setting Direction Aligning People Organizing & Staffing Controlling & Problem Solving Motivating People Training & Development Culture of Leadership John Kotter, “What Leaders Really Do”