Costco Connection - April 2007

small
business
When wor kers
go to war
How small companies cope
with called-up employees

^We’retaki“ng smaller

projects and

cutting back on

overhead

to keep the

company afloat”

PHOTODISC

By Harvey Meyer

DON’T MISUNDERSTAND Bernard Luther, CEO of Applied Consultants. The Vietnam War veteran is a “to-the-max” supporter of U.S. soldiers. But when company president Chris Maxin left the six-employee San Diego firm last spring to serve in the Naval Reserves for one year, for Luther it was like getting punched in the gut.

How would the engineering consulting company survive while Maxin commanded a base in northern Afghanistan?

“Chris has so much knowledge of our operations, and things were working so well,” says

Luther, a Costco member. “Then he got his orders and everything went to heck in a handbasket.”

Applied Consultants’ situation is an increasingly familiar one confronting U.S.

small businesses. The nation’s wars in Iraq and Afghanistan are requiring the active-duty call-up of hundreds of thousands of National Guard soldiers and Reserve members. Small companies are bearing the brunt of that service, since about 70 percent of soldier/reservists come from companies with 99 or fewer employees, according to Major Robert Palmer, strategic communications chief for

Employer Support of the Guard and Reserve (ESGR). That federal agency promotes cooperation with companies supplying the citizen-soldiers, mediates disputes and acts as an information clearinghouse.

A flip-side challenge for small companies often arises when the veterans return home. After the rigors of war,

they must be reintegrated into the workplace. That can pose problems if their physical and mental health disabilities require special accommodations.

How companies
are coping

Fortunately, the vast majority of companies employ just one soldier/reservist,

who may serve up to two years on active duty.

But for small firms, missing even one employee causes major hardships.

Just ask Luther.

He figures that since Maxin departed last May, revenues have tanked as much as 25 percent. Maxin’s environmental expertise had helped drum up fresh batches of clients.

“When Chris left, we elected to go into survival mode,” says Luther. “We’re taking smaller projects and cutting back on overhead to keep the company afloat. Once Chris comes back, we’ll go back into expansion mode.”

Instead of hiring a new employee, Maxin’s workload was distributed among the remaining five workers. Strong anecdotal evidence suggests most small companies mirror Applied Consultants’ action, says Palmer, also a Costco member.

One reason firms hesitate to hire replacement workers is worry about running afoul of the federal Uniformed Services Employment and Reemployment Rights Act (USERRA), which is intended to provide returning military personnel with a smooth reentry into the workplace (see sidebar on next page). USERRA mandates that all public and private employers reinstate veterans in their former positions or the equivalent within a specified time.

For Skyline Membership Corporation, a West Jefferson, North Carolina, telephone cooperative, there was no question that two employees who recently served as Army National Guardsmen in Iraq would retain their jobs. In fact, the 133- employee company surpassed USERRA requirements, contributing to the soldiers’ retirement plans and offering them a year-end holiday bonus when they were away. Skyline—which had presented the men with gifts, corresponded with them and threw going-away and welcome-home gatherings—was recently honored by ESGR as one of the nation’s top guardsman/reservist-supporting small companies.

Skyline’s Tim Stamper, a staking engineer, served 15 months in Iraq before returning with a combat-acquired foot injury. The company did not have to make accommodations for Stamper or for services technician Joe Taylor, who served 18 months. However, Taylor, who normally works weekends, was awarded weekends off his first year back to help him acclimate to home and family life.