Hurricane-hit firms face labour shortages

Apr 06 2006 by Brian Amble Print This Article

Despite the carnage wrought by hurricanes during 2005, the great majority of employers across the six U.S. states most affected stood by their employees, belying predictions of a wave of layoffs and benefit reductions.

A survey by of 119 large companies operating in areas hit by Hurricanes Dennis, Katrina, Rita and Wilma found that while many of those living there have suffered often devastating personal losses, surprisingly few employers had shed or laid off staff or cut benefits.

However, as's Joseph Kilmartin acknowledged, the figures reflected only firms that had survived the storms.

"There were probably tens of thousands of companies that got wiped out and probably will never come back," he said.

Only three per cent of companies affected by the hurricanes in Texas, Mississippi, Louisiana, Arkansas, Alabama and Florida were forced to shed employees, although in organisations where layoffs did occur, more than a third (35 per cent) of staff faced the axe.

Similarly, four per cent said that they had temporarily laid off employees, with these companies laying off an average of half their staff.

Indeed, far from shedding staff, nearly six out of 10 of the companies surveyed said that they faced staff shortages, while four out of 10 said they were intending to increase their headcounts. The extent of these shortages can be guaged from the fact that almost three out of 10 firms have raised wages as a result of the storms and only two per cent have reduced them.

More than nine out of 10 companies reported they were not reducing their previously planned 2006 salary increases, while one in six (16 per cent) had offered retention bonuses to employees averaging nearly $1,000 for hourly workers and nearly $800 for salaried workers.

A third of employers also offered some form of temporary living assistance - some for periods of more than a year - including free or subsidized housing, temporary cost of living subsidy, or free or subsidized meals.

Other initiatives that emerged from the surveyed were companies granting paid leave to enable staff to repair their homes, relocation assistance or work at a different facility within the same company and those offering staff grants or low-interest loans to rebuild their lives.

"We found surprisingly good news; employers stood by their employees and helped them following these unprecedented disasters," said Kilmartin.

"With all the bad news about the effects of these disasters and the response to them, it's nice to see that so many employers did the right thing for their employees. The initial, dire predictions of layoffs and benefit reductions have not come true, according to the information we have analyzed."