Downsizing isn’t something owners and executives enjoy doing, but it’s oftentimes necessary for the overall survival of the company. When employee salary and/or wage costs become too much for the company to handle, they must make the hard decision on whether or not to downsize. By freeing up some of those costs, even at the expensive of certain positions, they might turn their business back around into a profitable model. However, it’s imperative that you keep your employees motivated if you are considering downsizing, as you don’t want their emotions to affect the state of your company even more.
Laying Off Employees
Unfortunately, there’s no easy way to lay off employees who’ve been loyal to you and your company for the past X amount of years. Some companies may have guidelines and instruction books offering advice on what to say, but there’s just no easy way to do it. Telling someone who depends on their job for money to pay the rent or mortgage that they are no longer wanted is depressing for everyone involved; so, how are you supposed to approach the situation?
First, be upfront about the company’s current situation and financial crisis. More often than not, companies are forced to downsize simply because they can no longer afford to pay all of their current employees’ salaries. If this is the case, let the employees know the financial hardship at hand, and that there’s no other alternative for the company to survive. Most people will respect your honest and humility in this sensitive situation.
When laying off employees, act more as a friend and less like a boss. If you’ve worked with some of these employees for several years, there’s likely an authentic friendship already built. Let them know you are there to help them in any way possible.
Keeping Current Employees Motivated
You must also think about your current employees and how they will take news of the company’s downsizing. Even if they are left on board, they could feel a blow to their overall stability at work; thus, making them work less efficient. There are a couple of things you can do to prevent this from happening, one of which is talking to each and every one of your employees. As long as your company is relatively small, have each of them come in to your office for a one-on-one chat regarding the situation. This is more personal than a general employee meeting where you are simply talking to a crowd.
Another way to keep your employees motivated during a company downsizing is to recognize them for their hard work and dedication. Perhaps you can hand out special awards and plaques for certain achievements? Ideally, you want to set goals for your employees to strive for during the work week. If they successfully meet these goals, you can then reward them in the form of recognition plaques, gift certificates, catered lunch, etc. Think outside the box to come up with innovative new ways to show your employees their work is appreciated at the company.
