The COVID-19 pandemic has led to severe business constraints across the world industries, and this is mainly due to global lock-down and movement control measures that make it difficult for business owners to continue with ongoing projects or even generate revenue. In results, most of the SMEs or startups are currently facing financial difficulties, and many of them are considering layoffs to ensure they make it through the crisis — and found that the majority of corporate leaders are also considering some sort of financial action as a result of the pandemic.
A cost-cutting reflex is understandable. Leaders are obligated to make responsible decisions to keep their companies afloat. However, there’re a few recommendations or measures which you could take into consideration before the coronavirus layoffs.
Supposed everyone shall know that we are currently fighting not only against the global pandemic, but the economic crisis as well. In fact, it influences consumers' emotional state and purchasing decisions. Therefore, employers shall be open-minded to communicate with employees regarding the financial health of companies and what are the goals which would be prioritised in this economic crisis, instead of unnecessary guessing by employees. Employers shall not state empty statements such as “we will put our employees first.” These statements could be counterproductive when employees have already fallen into the state of worrying their income and job security. So it’s better for employers to be as specific as possible. For example, if your goal is to save jobs while meeting your bank covenants, say that. If it is to make a series of changes swiftly to shore up job security, clarify that you are prioritizing that decision over the other.
Share the Pain
Presuming that companies are reducing employee cost to avoid retrenchment, employers must lead by example and conduct cut backs on their own day-to-day as well. By doing so, employees wouldn’t feel like saps, sacrificing part of their salary while senior leaders or C-level remain unaffected. For instance, as a CEO, you shall take the biggest pay cut yourself, reducing high paid employees by certain % or mid-range salary employees by a decreasing % and so on. In results, employees would appreciate the approaches of temporarily forgoing salaries or undergoing pay cuts, in order to save job losses.
Review all the other options
Before announcing deep layoffs, have you considered discussion with your employees to apply unpaid leave? In fact, you might find that some employees welcome these options. Employers may make a clear clarification that one of the overriding goals is to avoid retrenchment first, and eventually would find that some employees are actually amenable to personal sacrifices inherent in salary-increment freezes, suspension of bonuses, prohibition of overtime, and other cost-saving measures. Understanding and compassionate employees would agree and respect these approaches when they found that it would actually minimise headcount reduction and protect their job security.
Instead of maintaining an emotional distance from the employees, employers shall lead with compassion more, especially the most vulnerable members in the company. As we know, it’s difficult to survive through a downturn and make tough decisions to keep your company afloat. Nevertheless, if we lead compassionately, we would touch the lives of every employee in an extraordinary way and come out stronger from potential slowdown than ever before by enhancing the shared values with the team.
As a business owner, we can also fully utilize company’s resources by having interdepartmental communication. Interdepartmental communication could help to polish the skill sets of employees and provide them an opportunity to learn or master a new skill. Businesses would outperform when team members are more likely to communicate with each other. If we articulate to our employees that such a job shift is only temporary, they would be more appreciative of our resourcefulness and pitch in where they can.