It’s never an easy conversation and it’s more than likely something that you’d rather keep quiet. However, if your business is struggling, then you should seriously consider telling your staff. After all, employer-employee trust is necessary in any successful business, and you won’t be able to hide the situation forever. However, before you rush in and tell them, there are certain things that you should consider. Here, we take a look.
The earlier that you tell your staff, the better. Rumours can often spread round a workplace like wildfire and you want to nip them in the bud. As a result, you should tell your staff about any potential problems before they become serious or before rumours begin to spread.
Rumours will put all staff on edge and, by not being open and honest with your employees, you could erode some of the trust that they have in you.
Plus, the earlier you inform them of any potential difficulties, the less severe they will be, so they’re less likely to be overly panicked.
However, there is a caveat to this: if you’re approaching a large company event or a national holiday such as Christmas it may be worth slightly delaying your announcement, as these are times when you need employee morale to be high.
Generally speaking though, the earlier you tell your staff, the better.
#2 Make them aware of contingencies
When you speak to them, come armed with news of contingency plans to prevent a sour atmosphere. Although bad news has to be relayed, you ideally want to ‘soften the blow’ with a positive spin or show them that you have the situation under control.
As such, you should look into contingency plans before the meeting. For long term problems, government initiatives can often act as loans to cover funding problems. While, if your funding issue is a short-term cash flow problem, something like invoice factoring could help instead.
By making them aware of possible contingencies (even if they’re not concrete), your staff will be under the impression that you have the situation under control.
#3 Ensure HR take an active roll
On the back of your announcement, it’s likely that staff will have a number of questions that they don’t quite feel confident asking you. As a result, it’s vital that you ensure HR are integrated into the process from the very beginning.
By fully briefing them on the situation in good time before the meeting, you’ll ensure that they’re well placed to tackle any questions and will be able to fully respond to employees openly and honestly with knowledge of the situation.
Regular meetings between staff and HR (and even yourself if you believe it to be necessary) should then become part of an ongoing feedback process.
#4 Arrange Follow-Ups
Your meeting shouldn’t be a one-off, either. After all, it’s only natural that your staff will have a number of concerns, and they’ll likely be startled by a following silence.
As a result, you should arrange semi-regular follow-ups and updates. This will bring a structure to the process and will prevent rumours from spreading about how the problem is developing. These do not need to be detailed (there may be occasions when an email will suffice). However, staff members will appreciate being kept in the loop, and it hopefully won’t be long before you’re providing them with good news.
Follow these simple steps and tell your employees of your financial struggles. It will never be an easy discussion, but it’s one they deserve.
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The key part has to be having the contingency plan in place BEFORE the discussion. That will mitigate the issue in the minds of your staff. There is plenty of free advice around about how you can get more work/customers (if sales have fallen) and also about raising emergency funding (even on a short term basis) to get a business through a cash flow trough, if that is the issue. Staff may even be prepared to defer parts of salaries if they are really committed to your business.