11 years ago, almost to the day, I was in the position so many of you are currently in – deciding how to keep my organization afloat during difficult times. As President & COO, I was responsible for aligning our expenses with our decreasing revenues. To accomplish these, we reduced our employment from 200 employees to 125 employees, we cut the salaries of execs, we reduced benefits, and we implemented a number of very painful cost cutting measures. It was an incredibly difficult experience, one that taught me how others and I operate and behave during adversity, and one I don’t wish on anyone. Here is some of my advice for those of you who may need to reduce your headcount. (I have spoken to many of you, and I know this is the unfortunate reality.) I am happy to speak with you (confidentially) if you believe I may be able to help you think through your strategy.
- Your responsibility is to make those decisions which preserve the existence of your organization. You must take action – don’t ignore the reality that your business is slowing. No organization = no jobs for anyone!
- Identify your key people, your top talent, those whom you want to retain. Conversely, identify your under performers, those whom you have kept on the team but whom you wouldn’t likely hire again. Lastly, identify your middle performers. If the time comes to make personnel cuts, keep your high performers.
- Make personnel decisions based on a defined set of criteria and not based on personalities or relationships. Doing this will preserve the trust you have built with your team.
- Treat all the team members with respect and allow them to keep their dignity. This is not their fault, and they should be treated accordingly. Provide as much emotional, financial and career support as possible.
- Communicate, communicate, and communicate with your team members. Be realistic in sharing the challenges of keeping your company in business. (Never mislead or lie to them.)
Laying off employees is not fun, nor is it easy. You will be (and really should be) sick to your stomach in having to make these decisions. But you must, because it is your responsibility as the leader. You must lead your organization to the “other side”of this mini-recession.
“The most you can hope for is that people respect you. They will not like you. Your leadership reputation will hinge on your decision making process, your candor and your compassion.” – Michael