Downsizing your company without hurting morale
Downsizing is a viable path for a business that’s looking to cut spending and increase profitability. But downsizing almost always means having to eliminate jobs and let people go, which can create tension, unease, and even anger among your employees. When you’re considering downsizing, you’ll want to be as thoughtful as possible in your approach so that you can ensure your business thrives on the other side.
Consider your alternatives
The reality of running a successful business is that labor will be one of your largest expenses if not the largest by a wide margin. Because of that, it’s easy for some business owners to stop crunching numbers the moment they realize how much they’re paying employees.
The Indeed Editorial Team suggests that before you begin actualizing a downsizing plan, you should make absolutely certain that there aren’t other ways you can cut costs without having to let people go. One example would be cutting overhead by shedding physical office space if you’ve moved to a flexible or remote model in the past few years.
That may very well mean having to make tough and unpopular decisions like cutting hours or pay. In cases such as this, it’s critical that you let everyone know that the moves being made are in the effort of ensuring nobody has to lose their job. The Indeed Editorial Team also recommends offering buyouts, which gives employees more agency and control but could ultimately keep morale strong.
Communication is key
If you choose to move forward with a downsizing plan, you have to be open and transparent in your communications with your people. Obfuscating what’s coming or not being up-front about the reasoning can leave valuable employees with the impression that you’ll continue to hide things from them in difficult times, which may send them looking for work elsewhere.
Entrepreneur contributor Janine Yancey notes that this will start with letting people know why layoffs may be coming. Doing your diligence to find other ways to save money is also important because that’s a fact you can communicate to your team to let them know that this was not your first choice.
Yancey recommends telling your staff about the decision around mid-day, which allows time for an open and honest discussion without hampering overall productivity. Doing this before the weekend may also be beneficial as it gives people time to process the information, which can reduce drastic and hasty decision-making.
Clear and honest communication is also essential when it comes to speaking with employees on an individual basis. You’ll want to make time to speak with employees who are staying so that they can voice their concerns and get from you the reassurance that their job is safe and stable. Yancey notes that this is critical to avoid losing valuable workers who will be even more important for the company moving forward.
It's also important to speak individually with those who are laid off, giving them the same opportunity to express themselves. Be clear about why the decision was made without demeaning or diminishing their work. The Indeed Editorial Team suggests offering letters of recommendation or references, or even putting a former employee in direct contact with someone who may be looking for someone with their skill set.
Downsizing is a challenging and disheartening thing to go through as an employer, but you can take steps to effectively ensure that business resumes as usual in its wake.
The information in this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.
Source: IMakeNews, Inc.
