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Business owners and executives everywhere — from small to large companies — are being forced to make gut-wrenching decisions as a result of the COVID-19 pandemic.
Management is forced to furlough or terminate workers. At least with many of the furloughs, the employees will likely be called back to work once the economy recovers from the coronavirus.
Either way, there’s a moral way to let workers go and then there’s the immoral way.
According to countless published reports, many CEOs have shown us the right way. They’re true leaders.
In understanding their employees are major assets, leading CEOs have decided to share the pain and forego their salaries in the millions of dollars and are making other significant sacrifices.
Lessons in how to treat your human capital
A publicly traded media company has reportedly provided us lessons — how not to act in cutting back staff:
Among its media holdings, Townsquare Media has 321 radio stations. In 25 states, it boasts it’s the nation’s third-largest conglomerate owner of radio stations.
The company has multiple stations in small towns — equating to a near monopoly of radio stations in communities such as Lawton, OK and Yakima, WA.
Publicly traded on the New York Stock Exchange, Townsquare released its stellar earnings for investors on March 16, 2020.
The release posted on the Townsquare site included this impressive statement by CEO Bill Wilson:
“I want to thank the amazing and talented Townsquare Team across the country for their hard work each and every day that is driving our strong results; ‘You Matter.’”
Abruptly, just 15 days later on March 31, a mind-boggling development was mentioned in the lead article of Radio Ink’s newsletter.
At Townsquare, 65 employees have been let go, 26 of them from the corporate office. CEO Bill Wilson and others from corporate have all volunteered to take a 10% pay cut. And, Townsquare has temporarily suspended its 401K match. Unless the crisis improves quickly, additional changes may be coming to Townsquare.
Understandably, radio stations face losing advertising revenue in this pandemic.
But favorable impressions are crucial.
Again, it was just a mere 10 percent management pay cut after Mr. Wilson called his employees “amazing and talented” and told them “You matter.” And “additional changes may be coming.”
Seriously? Where’s the empathy for lower-paid employees? Jobs are hard to find in a small town during a recession.
Townsquare executives don’t compare favorably with business leaders, including the radio sector, across the country.
Lay off workers the right way
If you must let employees go, do it on good terms. Show good faith, empathy and that you partner with employees and share the pain.
Being forced to terminate employees is a very painful decision. Choosing winners and losers in human capital is hard. But you need to thoughtfully consider whom to let go and whom to keep.
Indeed, it’s best to plan well for your company’s future; not to mention avoiding drama and lawsuits.
Even if you only lay off a few workers, you’ll see an increase in voluntary resignations, especially some of your most-valued people. Why?
Fear pervades your staff. Employees are tortured in thinking they’re next to be laid off, so they launch job searches.
Worse, the remaining staff members will elect to leave if you’re not careful and fail to treat the laid-off workers with great care and compassion.
So, help your laid-off staff members with generous career-transition aid. Believe me, they’ll appreciate it and your remaining employees will notice.
Avoid lawsuits
When treated badly, former employees tend to consult lawyers. Guess what the lawyers will advise? Quite often it’s “sit tight and let’s sue the company.”
Not only can you avoid legal actions, you’ll accomplish a lot more. Why? You’ll enhance your company image.
Your former employees will first seek jobs in their most-familiar arenas – your customers, suppliers or competitors. Ouch.
In Townsquare’s situation, who would want to risk appearing to show a lack of care for laid-off employees, especially media professionals, who might be tempted to bad-mouth their former employer in small towns?
Depending on the extent of “additional changes,” don’t be surprised by a listener and advertiser boycott. An adage comes to mind: “What goes around, comes around.”
So, if you must lay off employees, do it with grace and style.
From the Coach’s Corner, editor’s picks:
Management: 7 Tips for Success if You Must Layoff Employees – Companies typically make two short-sighted errors in a business downturn. They slash the workforce and marketing investments. To the contrary, it’s important to place a maximum value on your human capital and avoid layoffs, and to expand marketing. Here’s how.
Before You Fire Employees, Ask Yourself 3 Important Questions – Keep in mind that if you’re forced to terminate workers, there are normally three questions to ask yourself.
Employee Morale in Pandemic Warrants Your Leadership – Even if you’re designated as an essential business and keeping your doors open, your workers know people are losing their jobs all over the nation. So it’s important for you to maintain a healthy staff morale by taking steps to ensure they have faith and hope.
Upgrade Employee Morale Amid Coronavirus Social Distancing – The key is to focus on efficiency, which is enhanced by high morale, especially if many of your employees must work from home. Here are four tips.
Management: 5 Most Common Reasons to Fire Employees – With difficult or underperforming employees, you have two obvious problems – the impacts on your organization and the behavior of the individual. Here’s what to do.
If You Want Business Hypergrowth, What You Need to Know – Hypergrowth refers to rapid scaling of a business. It can be explained by pitfalls associated with the S Curve, and the point where the losing companies start falling behind the winners.
