Managing Staff Through Tough Times

Small business owners face many tough problems in a troubled economy. One of the most difficult challenges can be managing a staff through uncertain times. Whether it’s a matter of keeping anxious employees focused on their work or making hard decisions about layoffs, company owners often find themselves wondering what the best steps may be. The New Jersey Society of Certified Public Accountants (NJSCPA) offers these timely suggestions:

Be Realistic
If the business is experiencing financial troubles, the news will probably have already spread through the company grapevine, so don’t try to pretend that everything is rosy. Instead, be upbeat and realistic in your dealings with employees. You might acknowledge that the company has lost a big client, for example, but point out the other steps you are taking to adapt to changing times and find new opportunities. This will reassure employees that company leadership is dealing with the problems you face and make it easier for them to concentrate on their jobs rather than worry about the business’s survival.

Focus on Opportunities
Your employees are well aware of all the problems that a downturn can bring. That’s why it’s a good idea to remind them that a recession also provides many potential opportunities. Salespeople might be able to get new clients when competitors cut back operations or shut down. Employees who manage vendor relationships may find it easier to negotiate better deals on contracts.. Brainstorm with your staff to identify all the opportunities open to your company and develop ideas on how to make the most of them.

Find the Upside
If overtime and long hours are the norm at your company, then a slow economy can provide some needed downtime for hard-working staff members. Instead of allowing employees to become anxious about the downturn, encourage top people to take the vacation time that they have accumulated or to use slow periods to catch up on worthwhile projects that often get postponed in busier times. Again, you’re taking a consequence of the bad economy and turning it into a benefit for the company and its employees.

Consider Alternatives to Layoffs
Cutting back on staff when business is slow can be a wrenching decision for company owners, especially when you know employees will have a rough time finding new jobs. Maintaining a smaller workforce may also leave you at a disadvantage when the economy does turn around. That’s why it’s a good idea to examine all your options. Salary, hiring and benefits freezes, can prevent further increases in expenses. Salary cutbacks can make it possible to hold on to the same number of people for a smaller outlay, as do furloughs, in which employees are given days off without pay during slow periods. By taking these steps you can maintain the same experienced workforce and help keep your staff off the unemployment line.

Consult Your CPA
Your local CPA has extensive experience in working with small companies like your own in good times and bad. Be sure to turn to him or her to consult any problems facing your company during these uncertain times. If you don’t have a CPA, you can easily locate one online using the NJSCPA’s free, online Find-A-CPA service. Just go to www.findacpa.org, and in a few clicks you can locate a highly qualified professional who can assist you.



Produced in cooperation with the AICPA
©2009 The American Institute of Certified Public Accountants

September 1, 2009