People First Approach: Small Business Survival

In moments of uncertainty and concern, it’s not only about what leaders of organizations do but equally how they do it that matters. Here are 7 practical approaches for small businesses to put people first.

Communicate Openly

Be honest with your employees. Let them know what you know. Put yourself in their shoes and ask what they suggest. That is where your best ideas will come from. Instead of forcing your employees to second-guess what might be in store for them, be utterly clear with them about the financial health of your business and what goals you will prioritize.

Set the tone and be the calm in the storm. You’re riding a wave, you’re on a surfboard. Don’t complain about the wave or gripe. It’s not going to change. Pay attention to it though and adapt. Don’t get stuck in the decisions you made last week. Be willing to adapt and have new plans. You are going to have to live with these changes once the crisis is over.

Freeze Hiring

Take care of your current employees before you bring on new employees. Immediately, implement a hiring freeze until you’ve had an opportunity to evaluate if the business can meet payroll costs during a time of uncertainty.

Be Inclusive

Consider crowdsourcing ideas with employees. Ask your employees to voice their ideas on what the business should do. By showing them, not just saying, that you care about what they think, you will have stronger buy-in for the initiatives you eventually prioritize.

Share the Pain

If you are doing cut backs to save job losses, you must lead by example and do cut backs that impacts your own day-to-day as well. If you don’t, there is a danger that your staff will feel unworthy or unappreciated, doing sacrifices while the leaders are unaffected. Get a commitment for a pay cut from your leaders.

Review all Options

Before layoffs, consider all your non-obvious options for reducing cost. A four-day work week for roles where you have excess capacity will reduce staff cost by nearly 20% (assuming some costs will remain due to overhead and benefits). Some employees might agree to working half-time if they know that doing so will save jobs.

Consider decelerating pay decreases for lower salary ranges to protect employees who are the most vulnerable. For example, you might reduce salaries of your highest paid employees by 10%, mid-range salaried employees by 5%, and everyone else above a certain threshold by half of that.

Can the business continue providing medical benefits to furloughed or laid off employees for a period of time? Can wages be cut by a certain percentage or hours reduced by a certain number to decrease the number of layoffs, furloughs, or terminations? Can you partner with other businesses to help employees connect with quality companies that are hiring for temporary positions? These are things you should consider to help employees and treat them with respect.

Take Action

If the business is unable to meet payroll costs, an immediate reduction in staff should be considered. Make a talent assessment on who is valuable and how your business will be different if this person isn’t working for you next week.

In order to safeguard the business, you’ll be forced to make tough decisions, but it’s important to take swift action! If your business is unable to meet payroll costs or sick leave, it’s important to reduce staff as quickly as possible so they can take advantage of unemployment benefits and start preparing for the loss of income. Remember, your employees can be one of your greatest assets, and if you cut too deep, you may not get them back.

“Layoffs are first and foremost about your people: those who will be let go, those who remain with the company, and the leaders who guide the company through the process. So while it’s a business decision, what’s in motion are the people you’ve hired and have helped you build.”

Beth Steinberg

    Layoffs are considered to be a temporary request for an employee to take unpaid time off. These employees will most likely seek unemployment benefits, but our hope is to have them back as soon as possible. Furloughs can be a variety of things and tailored to your situation. It may be that employees work at a reduced rate, maybe they don’t work at all and stay home, they may be paid a minimal amount, or might be paid fully at some point in the future. However, don’t ask employees to work for free — you will probably face problems for doing so under state law. Terminations are just what they sound like. You’re letting someone go and they probably won’t be coming back. They’ll more than likely seek unemployment benefits as well.

Actively Communicate

Communicate weekly with active employees about actions the business is taking to meet extraordinary challenges, make it through unprecedented times, and emerge stronger. Communicate any changes to your sick leave policies. Make sure your employees know to not come to work sick.

Although you can communicate with employees that have been furloughed, you should not discuss anything pertaining to the business.

Join the Community

Connecting and networking with other entrepreneurs can benefit you in several ways u002du002d from new perspectives that spark business growth to new contacts and mentors to bounce ideas off. Start connecting with entrepreneurs today!

Go Remote

Newly imposed mandates are forcing workers everywhere to stay home. For those that are used to working 9-5 jobs in an office setting, working from home can bring new challenges. Settling into a new routine can be difficult but remember it’s not forever. Consider implementing telecommuting, if your business allows, which will enable employees to work from home. With technologies such as Skype, Google Hangouts, or Zoom, you will be able to communicate and collaborate with everyone on your team.