As spring for the northern hemisphere winds down, the worst of the COVID-19 pandemic seems to be behind us, at least in the US and Western Europe. With hundreds of thousands dead from the virus globally, times have been grim.
While every death is a tragedy, the most broad-ranging aspects to the pandemic have been the wide-ranging lockdowns and constrictions on public and economic life. While measures are easing both in Europe and in the US, the damage to businesses and jobs has been catastrophic.
Tens of millions of Americans have lost their jobs due to the crisis, and thousands of businesses have gone bankrupt. If you’re a small business owner, it’s likely that you’ve had to make some tough choices about your operations and workforce. If you haven’t had to make permanent layoffs yet, it’s quite possible that you will soon, as the economy enters a new recession. For those small businesses forced to consider letting go of staff, here are some tips to do so sensibly.
Plan things beforehand
Especially in a sudden crisis like this, there is a strong temptation to act hastily. If you don’t lay off staff immediately, panic may have you believe, then your business risks going under.
While bankruptcy is a real threat, and quick and decisive action is certainly welcome in an emergency, you might regret making decisions you haven’t thought over carefully.
To that end, be sure to have a plan about what exactly you intend to achieve by cutting costs in this way. A sudden reduction in staff might help stop the bleeding in your company’s cash flow. Or, the reduced output which results could make the improvement less than you anticipated.
Sometimes, layoffs are the right decision. But often they are not. Whatever you decide, make sure it’s been well thought out and considered.
Gauge the company mood
If you’re considering layoffs, it’s important to have a clear picture of your employees’ morale and engagement. This is because the more disengaged your workers are, the more likely laying off some employees will decrease the performance and productivity of those you retain. The net effect is that the financial benefits of downsizing may be less than you expected.
If your workforce is satisfied with its work at the company, staff reductions are less likely to affect productivity and your financial results. If you haven’t yet implemented an employee engagement measuring solution, then do so as soon as possible. An employee engagement solution can help you better recover from past layoffs, and plan for the future.
Dismiss the worst team players, not the worst individual performers
This might seem to be counterintuitive. Especially if you see your team’s productivity as a sum of individual outputs. In real-life work environments, output is more than the sum of individual performances. An employee contributes to their company not only through working on their own tasks—they also raise overall output by helping others with theirs.
While benefits such as guidance for new colleagues, contribution to group projects, and general teamwork may be difficult to measure objectively, you will probably already have at least some idea of which employees excel in such areas. If they also seem to be doing badly with their own work, cutting them some slack may well be the right thing to do.
Don’t make individual layoffs a public humiliation
In a stressful economic and health environment, tact might be the last thing on your mind. However, treating people with dignity is always the right decision, especially during an emotionally charged interaction such as a layoff.
Don’t make conversations of layoffs about how difficult it is for you. Be direct and compassionate with employees, and ensure that a member of management speaks to everybody one-on-one.
Publicly announcing dismissals has a profoundly negative effect on employee morale and performance. The sensitivity and show of respect of having these conversations one-on-one will be noticed by those you’ve chosen to stay on. They’ll appreciate the compassion, and will feel more compelled to continue to do their jobs as best they can.
Consider your regrowth strategies
After a drought, the rain returns. The difficult economic times we are facing will eventually come to an end, and if you’ve had to lay staff off, you should already be planning what to do in the future to get your business back to where it was.
This could mean switching to a new business model, pursuing a new target market, or even moving your business to a new physical location. This crisis could very well herald a new beginning for your enterprise.
Daniel Koychev is a staff blogger at Independent Fashion Bloggers. He enjoys writing about the latest in the world of fashion. In his free time, he likes reading, working out, stargazing, and learning languages.