Sept. 11 was the great divide. Decisions companies made about technology infrastructure, personnel, security, business resilience and supply-chain protection took on a much more urgent cast. At the same time, questions had to be answered about how to face the new New Economy, already wobbly and listing further south.
For Merrill Lynch & Co., the terrorist attacks had personal overtones. The financial giants headquarters at the World Financial Center, in the shadow of the World Trade Center, was damaged by the incident, and three Merrill employees perished.
Merrill faced tough choices not just about how to turn around its deteriorating financial fortunes—which had been flagging for months, threatening more downsizing and cutbacks—but also about how to make sure its employees had the resources and support they needed to weather future crises and wholeheartedly engage in improving the companys prospects.
Merrill took a number of steps to turn its fortunes around during that time, laying off 4,500 employees and cutting advertising, sales, travel, entertainment and marketing budgets by 15 percent or more. But one of its least known efforts also has been among the most successful: In early 2002, with demands for deep budget cuts from top brass getting louder, Merrills human resources executives made the radical decision to slash HR costs not by taking the outsourcing route—a predictable strategy that might have reduced expenses by perhaps 20 percent—but by building from scratch an HR call center of its own to provide quick answers to personnel concerns and handle routine administrative chores, such as processing new hires.
"Especially after Sept. 11, our priority was to make sure our employees remained well served," says Terry Kassel, Merrills senior vice president and head of human resources. "Budgets were under pressure, but we felt we shouldnt do something that might help us in the short term but hurt us in the long term through employee dissatisfaction and the inability to retain future leaders."