Alternatives to Downsizing: Respectfully and Openly Communicate to Employees

It seems that we hear, almost every day, about U.S. employers making decisions to do whatever is necessary to keep their doors open and remain in business. Whether the pressures include economic declines, business losses, mergers or acquisitions, or even natural disasters, employers are taking all kinds of actions in order to cut costs. 

And we often see businesses carry out staff reductions as one immediate solution for relieving budgetary concerns. But we need to remember that employee layoffs affect two bottom lines: (1) the employer’s and (2) the employees’.   

Even when staff reductions are considered a necessary bottom-line business decision, employers might find that employees can provide essential input when looking for alternatives to downsizing. 

Admittedly, not all organizations are positioned to consider downsizing alternatives, because not every business situation affords such options. But, when possible, it is important to consider all options and evaluate the alternatives - and it all begins with communication. 

Management can encourage open communication and exchange of ideas. First of all, you can include your employees in the cost-cutting, decision-making steps, and then effectively communicate the decisions to the employees. For example, employers can ask employees for brainstorming ideas. Then, ask them to come up with alternative solutions—even those short-term ideas can help a business get past some rough times. In fact, some short-term solutions can actually ‘counterpunch’ the dreaded options—sacrificing jobs or shutting the doors.

Step forward. Ask for your employees’ frank opinions and receive them openly. But, here is the ‘biggie’ -  employers must make it clear that they have the final word, and this understanding must come from both sides: management and the employees. 

Interestingly enough, when employees are given the opportunity to voice their opinions, you might find that they are more likely to accept the final decision. For example, if employee cutbacks become necessary, you may find that the surviving employees are more likely to be onboard with the final decisions if their opinions have been heard. 

Another important point: Even before a business gets to the point of having to take cost-cutting actions such as reducing staff, it is imperative that employers keep those lines of communication open with their employees. 

Even when times are tough, you will have your water cooler gossip—the old-fashioned term for social networking. And just because times are tough, it doesn’t mean that people stop communicating. 

So it becomes a matter of how an employer wants to be a part of the conversation. For this reason, employers should recognize the importance of making sure that they get the correct information out. Because, as we all know, gossip and rumors spread faster when times are unsure or when something obscure is going on. In the absence of information, employees will tend to make up their own stories, so management is well served when they put forth an honest, deceptive-free and, if possible, hopeful dialogue. 

In contrast, it is unproductive for employers to cover up and gloss over the truth. We see this happen all the time, particularly on the nightly news. Employees can see right through these half-truths and deceptions, and as a result, the covering up does significantly more harm than good by undermining trust in management. 

Again, effective communication plays a critical part in delivering any news to employees. Employers should take steps to show respect to employees affected by a downsizing or layoff. Even though the negative actions are necessary, the first steps include fully explaining the reasons behind management’s decisions. Next steps might include providing important information needed by the affected employee, including information on COBRA and filing for unemployment benefits, and other exit assistance when needed.

When possible, it is important to consider all options and evaluate the alternatives to downsizing--and it all begins with communication.