I am saddened to see so many companies quick to terminate employees—companies making profits, who don’t have to terminate staff and still choose to do so. Tough times reveal our true colors. Why not work together to find solutions to keep staff on hand for this temporary situation —going to a 3 day work week, cutting salary by x%, management taking a salary reduction, etc. Give the employee the choice to stay at a reduction, or not.
Some companies have been extraordinary. There are chief executives across industries who are cutting their pay—even to zero—as part of their strategy to mitigate the impact of the coronavirus crisis. Texas Roadhouse CEO Kent Taylor is giving up his pay for the rest of the year, (March 18, 2020, to Jan. 7, 2021) to help struggling employees amid the pandemic. Why don’t many leaders think like this?
Of course it’s business and if a company is unprofitable there will be termination and layoffs, but how employers treat their people during this crisis, is going to impact their brand for years to come.
You get judged on how you treat people in difficult times. It’s easy to be good when times are good.
Show employees you genuinely care. Any effort a company is putting to keep their staff will go a long way in sustaining the culture and brand. Sadly, many leaders don’t care nor do they wish to care because they think caring is detrimental to the bottom line these days. These rough times are a true test of a company’s corporate culture and values, especially those who say they “value people” or ” put people first”. As a leader everyone is looking to you. Do everything you can to fight for your employees and if you must let them go, make sure you use emotional intelligence and empathy during the termination process.
“This too shall pass”, and some companies have been laying off great employees out of panic. They soon might realize that they need these people immediately when things get back to normal. These companies are just focusing on the short term. Reactionary management is not strategic leadership. One thing they are not thinking of, when we are all up and running again—they may find it harder to retain loyal employees or attract top talent. And if I was in the job market, an interview question I would definitely ask would be, “how did your company handle the pandemic?”
It’s not even 2-3-4 months of lockdowns and companies are so quick to layoff employees. Consider the long term impacts. Layoffs are a short-term answer that harm a company’s long-term value. Research shows that organizations that layoff employees experience a:
- 20% decline in job performance from the remaining employees
- 36% decline in organizational commitment
- 41% decline in job satisfaction
- 31% increase in voluntary turnover the next year
If your Crisis Management Strategy is just to throw people overboard when the going gets tough, you will be in for a rude awakening. Cost cutting by cutting your main pipeline may not be such a smart idea. You would be losing intellectual resources and at a bigger risk of not maintaining a competitive advantage.
Employees are the branches of a tree that makes a company grow. They are your best brand ambassadors. Loyalty is a two-way street. Don’t treat your people only as the means to an end. Demonstrate that you value people and in return, you will earn their loyalty.