Among the issues that loomed large for Hibernia’s executive management team after the storm was employee welfare, especially housing. It became apparent quickly that if the company wanted to recover, it would have to help its desperate employees. Although recovery of physical assets was the first focus, it wasn’t nearly as difficult as bringing back employees.
More than 3,000 souls – from the New Orleans area after Katrina and another 500 from Rita – were dislodged from their homes for periods that ranged from a few days to many weeks and months. Some – with their families — were stranded in strange cities with little or no money or resources.
Who could help?
Some might assume naively that this burden would rest with the Federal Emergency Management Agency (FEMA) or insurance companies or worldwide relief organizations such as Red Cross or the Salvation Army. They would be deeply wrong.
In the disasters of 2005, the most immediate and effective relief came from employers, including Hibernia, although it generally was never acknowledged by the government or news media.
For their part, employees overwhelmingly said they wanted to work, but first they had to solve crucial needs – lodging, food, medicine, schools and other life-care issues.
Hibernia stepped up. As Miles Reidy, Capital One’s merger coordinator, said frequently, it was “the right thing to do.”
A broad-based plan of assistance was designed in less than a week after the first storm hit. It was run largely by human resources people, led by Mike Zainey and by corporate design, led by Donna Barry. There were also important assists by Capital One and other areas of the bank. Christine Ingles, payroll and benefits manager, designed and implemented many additional components – immunizations, busing and in-house legal aid for to help employees with bewildering FEMA and insurance company issues.
Almost immediately after Judy Pahren, a Capital One senior vice president, stepped in and set up an emergency hotline for Hibernia’s scattered employees, her people began to hear heartbreaking stories. Their logs documented urgent pleas:
- Employee has no house, nothing, lost everything.
- Employee is out of money, with child and diabetic parents (need insulin), trying to get to aunt’s in Ellisville.
- Employee needs shelter because husband hospitalized.
- She is running out of money. Hotel is $129 per night. No other place to stay. Has two rooms, 17 people in one room.
- Employee in hotel and trying to reach oncologist to start chemo. Please call if doctor can be reached.
Pahren was a relatively “old hand” at Capital One, an associate for 12 years, practically since the start of the young credit card company. She was a special projects person (read problem-solver) in the huge U.S. Card Division. She and Reidy had worked together many times in the past, and she admired his business skills. A day after Katrina’s landfall, she tracked him down and offered to help.
The next day, he got back to her. “Judy, I really need to get an 800 number going, where people can call in – Hibernia employees.”
Quick help from Capital One
Pahren was accustomed to pulling teams together quickly. It was her forte. She called some from her own group as well as others and said, “Look, let’s just work on this.” Then she reached the person in charge of the call center and asked, “How do we go about doing it?”
Capital One had a group for handling difficult customer calls, a 150-person “escalation team.” Pahren asked them to take on the Hibernia emergency calls. Although the issues would be vastly different from they were used to, the group was just what the doctor ordered.
“They were people who really want to do the right thing for the business, but also have empathy for people … They were the kind of people who bring a great deal of compassion and understanding to the table,” Pahren recalled.
She felt everyone involved understood the crisis. “We sat in a room, brought in lunch and brainstormed … We pulled in the Communications department, somebody who knew about training, a couple of managers.” She asked Kristine Rossi, one of her experienced project managers, to head it up. Human resources made recommendations about a script. They developed a quick form on which to gather information about each caller. They would pass this on to Hibernia, so its managers could figure out where their scattered people were.
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It was emotional and it was exhausting.
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Ready in 24 hours
In 24 hours, they got the whole thing up and had the call-in line available on Thursday. People in the center got their first calls from desperate Hibernia employees about 10 that night.
The stories they heard rocked them.
After a day, the Capital One team began to realize the enormity of the issues their future colleagues were facing. It was hard on the call center people. “We had supervisors walking the floor so that they could work with them.” Pahren called on their own EAP (Employee Assistance Plan) counselors, brought them right into the call center to help associates deal with the emotions they were handling … and that they were feeling themselves.
“We had management running around, and we had people who were truly counselors … it was kind of dramatic.”
They also sat down with Hibernia’s Zainey. Pahren was able to hand over a file of the types of calls they were getting and Zainey was able to offer guidance on how to answer the questions. “We were getting calls from a lot of people who needed emergency cash … and you guys were very good at saying, ‘here’s the kind of support we can provide’.”
“People also called and said, ‘look I would like to get back to work as soon as possible. It would help the situation’.”
Capital One ran this 24/7 bootstrap operation for about two weeks, until the calls tapered off. Then Pahren transitioned the task over to their HR center. “The people who worked on this the first a couple of days were exhausted. I think they didn’t realize what the (Hibernia) people were having to deal with. “Then we had people come in on the weekend and start making calls back, and I think that was also emotional, because then (they) were given even more information. Call-backs were hard …”
“The people who worked on this specifically, I think it was emotional and it was exhausting, but it’s like, ‘I’m doing something that really matters’ … People came in who were supposed to be out of town and stayed the whole weekend. They felt like it was the right thing to do. If I went back to those people … they would all say they’d do it again.”
What to do for employees?
The lifeline Capital One provided during those two weeks was a godsend. However, knowing the enormity of the hardships created a mind-bending problem for HR. Exactly what should the company do? How quickly could they provide relief? Except for the 9/11 tragedy, nothing in recent business history offered guidance.
Zainey and Capital One’s HR merger coordinator, Albert Valera, immediately sought ideas from companies that had been through other disasters (including hurricane Andrew). Ron Samford and this writer did the same with Bank of New York, which had been through the World Trade Center tragedy.
Both companies tried repeatedly to get guidance from FEMA and Red Cross, but those organizations never responded. Zainey surveyed other banks and found a few doing something, but none had yet developed in-depth plans.
Four-part relief plan
Whether to create a relief program was first discussed within a day of the flooding. A design took shape Friday, Sept. 2, from an email by this writer to CEO Herb Boydstun that outlined three ideas. By day’s end, after being vetted with the Executive Management Team and Capital One, a version of the plan was set in motion.
Zainey’s people began to communicate and implement it immediately. It consisted of four parts:
- Pay and benefits: Continue regular pay and benefits, including medical coverage, as long as employees were back to work somewhere or actively attempting to get back.
- Immediate relief: Provide a one-time $1,000 payment as soon as the company heard from displaced employees.
- Housing: Provide lodging at company expense – or reimburse up to $3,000 in the first month and $1,500 for several months thereafter – for those who needed it.
- Daily expenses: Provide a weekly reimbursement of up to $525 for living expenses supported by original receipts.
Employees and their managers generally embraced the plan. Some wrote grateful notes and emails to CEO Boydstun:
- Jill Oliva — “My husband and I would like to thank you, Hibernia and Capital One for the generosity shown to us after the loss of our home to hurricane Rita. It was so devastating and you helped lighten our load. We are truly blessed.”
- Trust Officer John Trainor —“I’m writing to thank you for the generous way Hibernia has taken care of its employees in the wake of hurricane Katrina. Our home was damaged, and I was able to live and work in Baton Rouge until mid‑November. Upon our return to New Orleans the bank has generously provided a hotel room for my family and me … In my opinion, Hibernia has gone above and beyond the call of duty in caring for us during this trying time …”
When Boydstun and other company leaders visited recovery worksites in Shreveport and Dallas, and branches in Texas and Houston, they were often greeted with emotional appreciation. “A lot of people saw other people were willing to help them when they were down,” recalled Boydstun.
Zainey recalled people in Shreveport “…coming up to me, hugging me with tears in their eyes, thanking me, thanking us, thanking the bank for what had been done for them.”
Cindy Collins, the company’s chief risk management and compliance officer, thought, “The company truly exhibited that it really cared about employees. I attended church in the neighborhood where I grew up, and as I talked to church members who worked at other institutions, (I found) they were not treated nearly as generously as we were.”
Some issues emerge
While an overwhelming majority expressed genuine thanks and operated within the rules, the relief was hastily conceived by people (including this writer) who had scant information about how to design this kind of assistance. A number of issues emerged.
First, a small percentage of employees apparently viewed the relief as an excuse not to return immediately. When the company figured this out, it tightened the policy, setting a Sept. 30 deadline for people to report in, after which the money would stop. Eventually, about 110 people were terminated on Oct. 31, 2005, after repeated urging to return. Another 25 could never be located.
“I think a lot of folks were expecting to be able to just do nothing for three months,” said payroll manager Yvette Soniat, “so the first time we stopped pay, they were completely taken by surprise and said they had no idea we were going to do that.”
‘Gaming’ the plan
Second, some employees – a small but vexing number – took advantage of the living expense money. As first conceived, reimbursable items were to be basic needs – food, clothing, medicine, childcare and items considered necessities. What a few employees sought went well beyond this. They were “gaming” the plan, trying to slip items through that clearly were not necessities. The company allowed many borderline items, but the more extreme ones were denied.
A third unforeseen – and unfortunate – issue was an accounting burden created by the hasty program. It imposed sometimes overwhelming work on a limited and tightly stretched staff. The policy called for expense reports and receipts. Employees submitted a blizzard of documentation.
Box after box of expense reports had to be checked. A backlog developed
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Appalled by what came in
Anne Oestreicher, 42, was a 13-year employee. A vice president in accounting responsible for “internal controls,” her job was to safeguard the integrity of financial information.
She was a perfect fit — fiercely independent, intellectually acute, a stickler for “doing things right.” With two “Lab mutts,” she evacuated to Alexandria Saturday, Aug. 27, after going into her office at 6 a.m. to work on records needed for the planned Capital One merger Thursday, Sept. 1. She left about noon with photo albums, her computer CPU, a laptop and clothes — “More than usual.”
Not long after Katrina, Oestreicher contacted her boss, Jan Macaluso, who asked her to find space at the Alexandria bank for a temporary accounting office. One of her first jobs was to figure out how to wire funds to hotels to confirm rooms for employees. She also quickly got involved in examining employee expense vouchers.
As strong as her controls training was, Oestreicher realized the unusual challenges demanded unusual solutions. She and others with hands on the accounts of the company had to take some reasonable risks and “figure out later” how to report their activities. To pay vendors, she used cashier’s checks and obtained temporary wire transfer authority.
“We all stepped up, figured it out, did what it took to get things done.”
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Three people in accounting – Anne Oestreicher, Chris Coniglio-Amato and Sharon Soileau – bore the brunt. The piles got so overwhelming even the controller, Jan Macaluso, came in on weekends. Often the staff would take boxes of forms home at night..
Oestreicher was the company’s staunch internal control manager and an expert at merger due diligence. With an unwavering ethical compass, she was tenacious about expense policy and practice and had an eagle eye for discrepancies.
Coniglio-Amato and Soileau, in accounts payable, had the unenviable job of rejecting expense reports that did not measure up. After years of experience, they could spot “sharpies” a mile away. “I was appalled at some of the things that came in,” Oestreicher recalled. “Why we didn’t kill someone, I don’t know,” she said with only the trace of a smile. Examples of questionable requests:
- New business suits: $1,200.
- A new home computer: $1,500.
- Cases of liquor: $300.
A related issue emerged, this one to do with original receipts. Some employees sent copies. When questioned, a few admitted they were saving the originals to send to FEMA or their insurance companies, effectively “double-dipping.”
An expensive solution
Finally, there was the cost of the program. No one questioned that the emergency relief did immense good, but when it was added up – the emergency grants, living expenses, housing allowance – the total was $26 million by year-end, about equal to one month’s entire payroll. And it did not stop on Dec. 31, 2005. The New Orleans housing support continued into the new year because employees had nowhere to live other than hotels, motels and apartments.
Other relief measures
Hibernia’s HR team did other things to ease the plight of employees. Christine Ingles, Donna Prinz, Janet Fowler, Sam Wilkinson and others arranged for:
- Special immunizations. Public health officials urged tetanus and hepatitis inoculations for everyone re-entering New Orleans in early days. Hibernia arranged free shots at work.
- Shuttle buses – Baton Rouge/Northshore. Commuter and recovery traffic jammed highways like I-10 and the Causeway. Ingles’ staff set up shuttle buses to and from the city.
- Shuttle buses – Shreveport. Recovery staffers working in Shreveport needed to get back to New Orleans to look after damaged homes. Ingles’ staff arranged weekend buses to and from New Orleans.
- Legal seminars. Many employees struggled with insurance and FEMA Ingles hired lawyers who were expert in emergency relief and arranged for them to give seminars to employees.
- Mental health counseling. The company’s regular Employee Assistance Program provided limited mental health counseling. Ingles beefed this up, providing unlimited sessions. She also brought in counselors for group meetings.
- Toll-free support line. The emergency hotline was continued until most of the 3,600 displaced employees were accounted for.
- Employee survey. Ingles arranged an employee survey to determine their needs and how they were coping.
- Vacation carry-over. Normally, Hibernia required employees to use their vacation in the year earned. Zainey extended unused vacation days into 2006.
- Medical coverageChild care. Provisions were made for temporary child care in various recovery sites and the company continued its 25% subsidy of regular day care costs.
- On-site meals. One of the most-appreciated measures was providing free meals at worksites – both breakfast and lunch – for the displaced as well as recovery people.
- Clothes and toy drives. HR people arranged clothing and toy drives among employees. An outpouring of items was assembled and distributed.
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‘So many things to juggle’
A senior vice president and 18-year employee, Christine Ingles was in charge of employee benefits and payroll. A single mother of two children, 12 and10, she evacuated with her mother and 91-year-old grandmother. They first drove to Jackson, MS. “I didn’t have a good feeling about this one,” she recalled.
Monday night, electricity and cellphones died. It was hot, and she was “starved for information.” Tuesday, she learned her Lakeview home was flooded and people were being rescued from roofs. She drove to the Fort Worth home of her sister. En route, Ingles reached Yvette Soniat, her payroll manager, and others, but worried about those she could not find. For a time, she put her kids in Fort Worth schools. Although they had “been through this drill before and were very resilient … there were some bad days, a lot of tears.”
Once back, she especially sympathized with other single moms – Dee Duhe, for example, who had to leave her 4-year-old son with her mother and sister in St. Louis, and Jackie Bruce, whose daughter was sent to live with an aunt in Birmingham.
Although Ingles lost her home, she felt it was “not what was lost, but who – family, friends, community – that was hardest.” By mid-2006, she had sold the ruined house, bought another and planned to leave the company at year-end as the HR department wound down.
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Hibernia’s medical plan probably was the benefit most valued by employees. Surveys bore this out year after year. The program was reasonably flexible, generally permitting employees to get adequate care even in the faraway places to which they were scattered, but this was not to say there were no snags.
Donna Prinz, a benefits coordinator working for Ingles, ended up in Baton Rouge and temporarily served as a one-person benefits department. She met many needs by interceding for employees with the insurance provider. Her job was not made easier by the fact that, for a while, she had to jump from desk to desk, sharing computer time with others.
Vacancies and recruiting
An unexpected result of the disasters was an upsurge in vacancies and the need for more recruiting.
Hibernia’s average staff level was about 6,500 people before the storms. Turnover usually ran between 250-400 openings at any given time. In early 2006, vacancies shot up to more than 1,000, due to continued expansion in Texas and unclaimed positions in Louisiana.
Recruiting for this many vacancies was unprecedented and required the use of outside firms to help find people.
Employer of choice?
Amazingly, there were more job opportunities six months after the disasters than ever before in the company’s 135-year history.
After all was said, Zainey felt Hibernia had done the right thing by its employees. “I think the bank really was an ‘employer of choice’. The bank proved it.”
“I really think the bank stepped up, and I cannot be prouder of the place I work … I believe the employees stepped up as well. I think the bank led, and the employees stepped up, following the lead of the bank.”
Eventually, employees themselves would be the best judge of that. New Orleans CityBusiness, a weekly business newspaper, sponsored a citywide survey in early 2006. In this independent sample, Hibernia was ranked one of the best places to work in the New Orleans area. Employees had cast their ballot.