When the going gets tough,
small businesses spring into survival mode (part 1)

Using state resources

Courtesy of U.S. Chamber of Commerce

Fred Howe of Utility Professional Services, Inc., in Fredericksburg, Virginia, is using a state program to help him hold on to his employees. Fred Howe is willing to do whatever he can to make sure that he doesn’t lose any of his highly specialized staff. Utility Professional Services, Inc., a utility engineering and consulting firm, has 28 full – and part-time employees, most of whom Howe lured away from large national utility companies. “I wanted to create a family environment. I told them all when I hired them, ‘I want this to be the last job you ever have.’”

Three years ago, Howe started to see a slowdown in the residential sector and moved toward commercial building consulting. But business in that sector soon began trialing off as well. “When the recession kicked in hard around us in late 2008, we had enough funds put aside for a rainy day,” says Howe. “We just didn’t know it was going to become a monsoon.”

Faced with having to lay off employees, Howe had to come up with another solution. He moved his salaried employees to hourly pay based on client billings. Howe continued providing benefits, including medical, dental, and a group life insurance plan. These two moves allowed him to cut his monthly payroll in half, and so far he has not had to lay off anyone.

Recently, an employee told Howe about a “reduced wages” program run by the Virginia Employment Commission that enables employees to draw partial unemployment benefits while staying on the job. For of Howe’s employees participate in the program, which “bridges some of their pay to prevent them from becoming a complete burden on the Virginia unemployment system,” Howe explains. “It’s not gaining us any money; it just keeps our team together.”

For now, Howe says that things “have not gotten any worse, but they aren’t getting any better.” If the situation doesn’t improve in the next three to four months, he may have to revisit the decision on whether to lay off employees.