Letting staff go is usually a tough decision and the last resort. Staff are part of your team, and although they may not be perfect all the time, they are really valuable. It usually takes considerable time and effort building up a successful team, and it feels like a complete waste to have to offboard them. Plus, if things improve, you will have to find and train their replacements, which will be time-consuming and expensive.
Government Subsidies will come to an end
The UK government’s unprecedented support during this time has made a difficult situation more bearable and has been extended. However, it will soon come to an end (April 2021). Already 1 in 5 small businesses have had to let staff go, and many more are weighing up what may need to be done after the government subsidies are withdrawn.
The type of business you are will make a big difference in whether you can bounce back and be profitable without having to offboard valued colleagues. If you are a small service business, the chances are that you employ fewer people and that they make a significant contribution to every stage of the customer journey. Losing them would feel especially hard. They are often extremely loyal, and you hate the thought of causing personal hardship. And even if you employ more casual labour, e.g. in the hospitality sector, you know your success, like any business, depends on having the right people in place.
“I don’t want to let my staff go, but what else can I do?”
Don’t rush to get rid of your staff. Rather than make hasty decisions, taking a long fresh look at all the company expenses is worth doing. Analyse your fixed costs, which are incurred no matter what, and variable costs, which can be flexed.
You’ll get a better overall picture of your business health and may find you can save costs in unexpected places. In a recession, all businesses suffer to some extent; everyone is in a difficult situation, so re-negotiation of your terms of trade is often more successful than you might imagine. You might as well “ask the question” – sometimes the answer will be more favourable than you think!
Only when you have explored all cost-cutting opportunities should you decide to offboard staff. That way, if you do have to say goodbye to your people, you will be able to tell them, hand on heart, that you have looked at all the options, and have been left with no other choice. Your staff will hear the truth of that, and it will at least let them leave them with their dignity intact. (It might also be wise to maintain good relations as you never know when you might be working with that person again.)
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.