Allaying Workers' Fears During Uncertain Times

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Many Executives Seek Ways to Maintain Morale and Productivity, Handle Their Own Stress Amid Financial Slowdown

Like many others, Kraig Kast is feeling the pressure of the volatile U.S. economy. Mr. Kast has another concern, too: whether his 200 employees are worried about layoffs and distracted from their jobs.

"Everybody is nervous," says Mr. Kast, chief executive of Atherton Trust, a Redwood Shores, Calif., wealth-management and trustee-services firm. "They're all talking about what's going to happen and whether it's going to affect us."

The financial crisis is testing many managers' abilities to maintain productivity and morale. Employee-assistance providers say they are fielding more requests from managers seeking help with uneasy workers. Callers hail from companies of all sizes and sectors, though many are in financial services. Managers' concerns range from motivating distracted workers and curbing lateness to allaying rumors, especially about possible job cuts.

One provider, Ceridian Corp., says calls from managers at its 10 largest financial-services clients jumped 30% last month, compared with September 2007. Calls from rank-and-file workers at these organizations rose by 16% from a year ago. The Minneapolis company services 38,000 employers with more than 16 million workers world-wide.

Rival ComPsych Corp., Chicago, says requests for management training and phone-counseling services rose 17% last month. Value Options Inc., a Norfolk, Va., provider, says requests for management consultations rose 10%.

Managers seeking help say employees are spending more time online, making personal phone calls and talking to one another about the fate of their companies. They say more workers are arriving late, and that they've been overwhelmed with questions from employees about job security and retirement investments.

"They're seeing the stress in the employees that they're supervising," says Rich Paul, vice president of health and performance solutions at Value Options.

As a result, many managers are having a tough time doing their jobs while handling their own stress. Employee-assistance providers say they are fielding more calls from managers than in past downturns, most likely because the turmoil worsened abruptly last month, with big impacts on workers.

Customers can pose challenges too. A bank manager called Ceridian Wednesday seeking advice after a customer called and threatened suicide, says Zachary Meyer, a senior vice president at Ceridian.

"You carry the stress of yourself and your family while you're trying to take care of your people," says Harriet Pea, a management consultant in Denver with 18 years of supervisory experience at large corporations. "You get pulled in many directions."

Erika Weinstein knows that. "[Employees] are coming into my office, closing the doors and asking, 'What's going to happen to me?' " says Ms. Weinstein, president of Stephen-Bradford Search, a New York recruiting firm. Last week, she called a meeting to tell her 50 staffers that their jobs are safe, and urge them not to panic. "Our line of credit is good," she says she told the group. "But now we really need to buckle down."

Leaders of the employee-assistance firms applaud that kind of move. They urge managers to be as candid as possible about a company's prospects -- good or bad. Richard A. Chaifetz, ComPsych's CEO, says false rumors can spread fear and hurt morale. When layoffs are necessary, Dr. Chaifetz says, managers should detail how many employees will be let go, when, what support they'll receive and whether further cuts are likely. "Frequent, objective and honest communication is the most important thing," he says.

Dr. Chaifetz also recommends that managers tell employees that the best way to safeguard their jobs is to boost their company's prospects by staying productive. "It will motivate them," he says.

At Atherton Trust, Mr. Kast says he's encouraging employees to focus on satisfying clients. "Clients are the lifeblood of the organization," he says he explained to his staff. "We have to take care of them if we want to keep our jobs." Mr. Kast says he has cut staffing by about 25% since 2005 but has no plans for additional cuts. Instead, he's being more cautious in taking on new hires and clients, he says.

Mr. Paul, of Value Options, suggests managers keep an open door and stick to a normal routine. "They oftentimes are the ones that employees look to for cues for how things are going," he says. "We remind them to be visible during stressful times."

Managers also can help ease employees' concerns by offering financial seminars or reminding workers of the support services their companies provide. Kevin Kelly, a director at Ernst & Young LLP in New York, recently made this point to the six human-resources managers who report to him. "This is a great time for my team to demonstrate those benefits," he says.

Write to Sarah E. Needleman at sarah.needleman@wsj.com