Deployments take toll on employers Jan 23, 2006 14:16:20 GMT -5
Post by Moses on Jan 23, 2006 14:16:20 GMT -5
Article Last Updated: 1/22/2006 02:48 AM
Deployments take toll on employers
Casualties in commerce: With workers gone to war, businesses suffer economic losses
By Dawn House
The Salt Lake Tribune
Salt Lake Tribune
SCIPIO - The "open" sign lying face down in the gravel at Sam's Auto & Diesel is a reminder that business casualties in the United States' war on terrorism are cutting into the nation's economic fabric.
Owner Sam Probert closed the repair shop in this town of 290 after his mechanic, Jim Rasmussen, was mobilized in January with the Utah National Guard for an 18-month stint in Iraq, his second since the war began in 2003. Probert runs a big-truck repair business with four other mechanics in Fillmore, about 25 miles away and with nearly eight times the population.
Now, Probert has rerouted the shop's number to his cell phone and does whatever repair work and towing that he can there after hours.
"The loss hit me pretty good because it takes months and years to recover from filling in for another person, at least down in this part of the world," said Probert, who sometimes sleeps on an old sofa at his Fillmore shop after late-night calls.
Like tens of thousands of employers nationwide, Probert must absorb all losses whenever one of his workers is called to active duty, then provide a comparable job when the soldier returns home. Yet little is known about the economic impact on U.S. employers of the most extensive Guard and Reserve mobilizations since World War II, according to testimony last fall before the U.S. Senate Committee on Small Business and Entrepreneurship.
In a first-ever survey of its kind by The Salt Lake Tribune, half the employers questioned reported economic losses when workers were deployed, ranging from less than $100 to more than $1,000 each month. The average cost for each deployed employee - often from overtime pay or training replacement workers - was about $420 a month.
The survey showed that costs for deployed workers were about the same in terms of company size, economic sector or whether companies relied on current employees to pick up the workload or hired replacements. In addition, private sector costs were similar to those of public agencies, $439 to $404, respectively. Overall, monthly average costs ranged from $375 to $585.
Probert calculated that he's lost $50,000 in profits since he closed the Scipio shop.
Then this summer, a competitor built a larger travel plaza closer to Interstate 15 in Scipio. There's a Chevron station, a market, an Arctic Circle and a huge sign that dwarfs billboards in the older business section farther from the freeway. Crews also are building a spacious rest-stop adjacent to the Chevron and a bigger car repair facility.
"I understand that we need protection for our nation," said Probert, an 11-year-veteran of the Utah Guard. "Mostly, I try not to think about what would have happened if I could have kept the Scipio shop open when Jim was deployed."
Small private firms are particularly hard-hit when they lose key employees or workers with highly specialized skills, according to a report from the Congressional Budget Office (CBO). It's estimated that smaller firms employ 18 percent of all reservists, and that businesses with 100 to 499 workers and self-employed reservists make up an additional 35 percent.
Gathering information on employers can be difficult. Until two years ago, the Pentagon did not require reservists and Guard members to provide the names of their civilian employers.
Typically, reservists had been reluctant to inform the Department of Defense about their employers, or, conversely, their bosses about their reservist duties. Some have said they worried about getting hired in the first place, or denied promotion, or even to be unable to take their old job when they came home.
"There is little information about the type and magnitude of the disruption that firms experience when their reservist employees or reservist owners are activated," Douglas Holtz-Eakin, director of the CBO, testified before the Senate committee in September. "As a result, the impact of call-ups on businesses has not been systematically examined."
The longer and more frequent reserve deployments raise questions about how well civilian employers can absorb the costs incurred, according to a CBO report released in May. At the same time, citizen soldiers are serving longer deployments than during the 1991 Gulf War, the 2001 terrorist attacks on the United States and in the first months of the invasion.
The sting of deployments goes beyond soldiers' families and the workplace. At the Central Utah Counseling Center in Richfield, clients were stressed when they were assigned new therapists when a counselor was called to active duty for six months two years ago and then, last January, for an 18-month stint. The added caseloads for the other five therapists reduced overall services as well.
"He was just getting used to all the job entails when he was called up the first time," said Arleen Cromwell, the center's manager. "[In] a small center like ours, having one therapist called up twice has been quite a hardship."
Nonprofit organizations are feeling the pinch as well.
The Great Salt Lake Council, Boy Scouts of America, lost $100,000 in fundraising revenues when a staffer was deployed for 21 months. And when the council learned the soldier's family was in a financial bind, the Scouts picked up the wage differential for his last six months of deployment, costing another $6,000.
"Our entire team felt good about supporting one of our own who represented all of us in liberating Iraq," said CEO Paul Moore.
Losing a single employee to active duty can disrupt companies' production rates, significantly affecting the bottom line, said Jason Miller, operations manager at One Stop Counter Tops in Lindon.
"We couldn't afford to have a lot of workers deployed at the same time," said Miller. "It wouldn't sway my decision to hire someone from the Guard because they have great management and leadership skills, but it would affect placement in the company so that production wouldn't be hurt."
That can affect giant companies as well. American Airlines, the nation's largest carrier, took a hit shortly after 9/11 when nearly all its pilots who were military reserve members were activated. Now at any given time, 200 to 300 of its 9,000 pilots are deployed. The Federal Aviation Administration requires retraining after pilots are absent for more than 90 days, but the airline works the time into its normal training schedule.
"The only thing that could hurt us would be some sort of quick call-up, without any warnings," said spokesman Tim Smith from the airline's base in Fort Worth, Texas. "Nowadays, reservists get some advance notice."
Still, balancing workloads of activated employees can be tricky. Congress provided job protection for veterans with passage of the 1994 Uniformed Services Employment and Re-employment Rights Act, which forbids employers from refusing to give jobs to returning troops and requires them to provide comparable positions.
Even so, claims of job discrimination and job placement are the top two categories that national ombudsmen help resolve, said Maj. Robert Palmer, spokesman for the National Committee for Employer Support of the Guard and Reserve.
''Sometimes the Guard and reservists have an unreal expectation of what they are due," Palmer said, "and some employers don't know what they're required to do.''
There are so many questions - on promotions in workers' absences, pensions, raises, vacation time and security -that the U.S. Labor Department has established a Web site: http://www.
There are no job-protection laws, however, for self-employed reservists or for veterans laid off when companies downsize in their absence. On the other hand, protections that are in place may be exacerbating difficulties that call-ups present for employers, said the CBO study. For example, the law limits firms' flexibility in setting work schedules to prevent key vacancies and imposes additional costs on some employers.
It's not all that easy for returning soldiers and airmen, either. Thursday was Shandy Rasmussen's last day with her husband, who took a leave to be with her for the Jan. 5 birth of their son, Everett Chan. She said she isn't worried that when her husband returns home from Iraq this spring or summer, he most likely will be making a 50-mile-round-trip commute to Probert's shop in Fillmore.
"In rural areas, you're lucky if you can find a job that's anywhere close to home," said Shandy Rasmussen, who is also caring for her 2-year-old stepdaughter, Marci.
Jim Rasmussen said it's tough to find a job, period.
"Most companies can't afford to have extra workers around so they will have to let someone go when a prior employee comes back from a deployment," he said. "The whole community is making sacrifices, not only employers."
The Salt Lake Tribune commissioned a survey of 152 Utah employers to study the effect of National Guard and Reserve deployments on the workplace. Here are a few of the findings.
50 Percentage of employers questioned who reported losses between $100 and more than $1,000 per month.
$400 Average cost per month for each deployed employee.
13.2 Percent of employers reporting increased costs who estimated their losses to be more than $1,000 per month.
Explanation Box: In 2005, the Utah National Guard gave the The Salt Lake Tribune the names of 550 employers for a survey on the economic impact of deployments on soldiers' employers. However, the names were provided by the soldiers, who did not always give accurate information, such as valid addresses. Military researchers say that's commonplace, because a construction worker, for instance, may not know where his company's main office is located. The Tribune pared the list to some 450 employers and after two mailings, 152 employers responded for a margin of error of plus or minus 6.5 percent.