When I say “honesty”, I don’t just mean “don’t lie” to employees. I mean be open and candid on matters where employees are affected. Rieva Lesonsky at AllBusiness.com’s Small Business Blog recounts a conversation with Tom Markel of iBank.com.
Recently, when Markel was confronted with a serious need to cut costs, rather than letting good employees go, he gathered them together for a brainstorming session. As Rieva tells it:
He told them, “Times are tough and here’s what’s left
in the bank. I don’t want any of you to leave, so what can you do to
help?” In other words, he asked for wage concessions … and he got them.
Employees volunteered to take pay cuts, salespeople went commission
only, and 2008 bonuses were eliminated. Instead of iBank providing
their usual free Friday lunch, the staff brown bags it during a Friday
staff meeting and then gets to leave at 3 p.m. Markel promised when
profits return (and things are already picking up this month, or as
Markel puts it, “the sacrifices are already paying off”), he will “pay
them all back” and return to the previous wage structure. His staff’s
reaction? They wanted to know why he waited so long to tell them what
was going on.
Don’t be afraid to talk with your employees. You’re still the boss, but assuming they respect you, they probably have some good suggestions about ways to make the business more efficient. This need not just apply to pay concessions during tough times, either. When business picks up again, maybe your employees can help you streamline the business and make it even more profitable.