All men may be created equal, but not all are fit to be leaders. (See this post.)
Here, I’d like to shine the light on a few stellar moves from leaders who are doing the right things:
- If you must make “cuts” to salaries, start at the top, and make it known that you’re starting at the top. We’ve had at least one client in the last several months whose top brass decided NOT to make any adjustments to their own salaries, and proceeded to lay off ten percent of their staff. Since TRUST is the most important factor in engaging employees, I can only imagine how long it will take to repair the trust that was broken from this one short-sighted move. On the other hand, I was jawboning with another client who said that all of his top people agreed to reductions of 5-10% of their salaries. It was the first bullet point in his “state of the firm” update memo.
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Treat employees like adults. If expenses need to be cut, solicit ideas from all levels of the organization on how to make it happen. Frontline employees are closest to the waste and excess of your organization, and will have the best seat in the house to call the cost-saving shots.
- Make layoffs a last resort. Here are some options: (a) ask employees to work a reduced workload for reduced pay, e.g. work Monday-Thursday, and receive 85% of your salary; (b) invite employees to innovate on how their department or team can reduce its overhead without laying people off. In one department of 12 people, if each person will take one additional (unpaid) week off in the summer (in addition to their normal vacation), it saves the organization three months of salaries, and gives each employee additional personal time.
And of course, it’s critical to communicate with employees at each step. Specifically, leaders must impart a sense of perspective (how long might this last, what’s happening to others in our industry, etc.) and control (what can I personally do to help my firm and myself make it through this crisis?)
