How to Navigate the Recession

There’s a right and a wrong way to deal with tough times caused by the recession. Choose carefully.

There’s a right and a wrong way to deal with tough times caused by the recession. Choose carefully.

One of the biggest challenges in navigating this new economy is finding a way to keep sailing forward while keeping everybody on board. Whether your ship has sprung a few leaks or you’re struggling to stay afloat, the question of how you treat your crew – your employees – matters. And while every business owner has his or her own way of dealing with a downturn, what we all need to remember is that the choices you make now have long-lasting consequences.

In the case of my business, Rennie Marketing Systems, we had to let two people go last November as economic conditions in the real estate business deteriorated. Sadly, those layoffs proved to be not enough; conditions continued to worsen over the winter, and another three people were let go in January. In 35 years in business, I have never had to lay off anyone. These moves upset the culture of my company tremendously and many tears were shed, including by me. I decided then and there that my number one job going forward, as a boss, would be to make sure the remaining crew felt safe.

More than ever, you have to earn the trust of your employees, and you do that by creating an environment in which, in good times and bad, they want to be. That’s why, after the layoffs, I gathered our remaining employees and guaranteed them that, for the next two years, they all would have jobs. That’s why, during a slower time for our business, we’ve given staff Friday afternoons off – with pay – through the summer. And that’s why we’re still holding our annual bonding retreat in Las Vegas this month. I need to make sure everybody feels secure – that everybody is “on board” – so they will continue to be healthy, happy and, yes, productive employees.

The danger, as employers, is that we get caught up in a sort of hysteria and start making decisions based on fear. Company A is cutting back, therefore I should. But is cutting cellphone usage or printing on both sides of the page or forcing employees to take unpaid vacation really going to help you in the long term? Are you making choices that will reflect well on you in the years to come, or are you making decisions that anyone could make – adopting a one-size-fits-all strategy? Frankly, when I hear of a high-end restaurant limiting the tips its staff gets  to a maximum of 10 per cent of the bill – with “the house” keeping anything above 10 – all I can think is, The customer knows. Their server is miserable. And if the customer knows, then the customer starts wondering, “Where else are these guys cheaping
out?” (“Dear, that crème brûlée looks awfully tiny, doesn’t it?”).

The fact is, next to our families, employees are our most important human assets. And to place employees in what I consider an unsafe environment – where they go home at night wondering where they stand with you as an employer – doesn’t do your company or its fortunes any good. Are you afraid to ask employees how they feel about your company? Because if you are – if you’re afraid of honest and meaningful feedback – then chances are you will be unable to create that safe environment. And remember, customers want a positive experience with your employees too, and if they’re not happy, your customers won’t be happy. The bigger risk is not just losing workers, but losing business.

So yes, times are tough. But that doesn’t mean you have to be. When forced to consider difficult choices – like laying off somebody or cutting costs – think about the long-term consequences of your actions. And when you finally have to make that decision, make sure to say it in person, not in a memo. You owe it to your employees to have a dialogue – so they know where you stand and you know where they stand. Ultimately, we’re all in the same boat.