What To Tell Employees If The Company Is Failing
Whether delaying the bad news or sharing it sooner, give staff the info they need.
30 percent of small businesses won't survive two years, a cheerful stat from Industry Canada. Want another? Just half live to age five. So much for illusions of permanence.
In the companies that are failing, management has to fess up. Sooner or later, admitting to staff that things are going kaput will suck.
So what to tell the troops, and when to come clean? Whether sowing possible panic with early reveals, or stalling till the fiasco erupts like a supernova, there’s some important stuff to convey.
First, Chew On Delaying The Reveal
If the business hasn’t imploded yet, there’s reason to hide pending doom – assuming the crisis might be fixable. Announcing that the company is sinking will create a tsunami.
Top talent could decide to abandon ship. Remaining workers might freeze up with fear. Either one makes it even harder to stay afloat. And good luck hiring high-caliber replacements. Some will be spooked at boarding a floundering vessel.
Strategic silence can buy precious time. Suppliers keep supplying. Financers maintain lines of credit and loans. Media isn’t atwitter with news of looming closure.
Then again, holding back deprives workers of planning ahead. Decent people find out late they should have polished their resumes.
Or Would Confessing Upfront Be Better?
It’s delusional to think a failing business can cover for long. What happens when perks get cut? Next, hiring and salaries are frozen like tundra. Reduced work hours, surprise downsizings…tongues will wag with brutal rumours.
Why not get in front of it and tell the staff sooner. There’s more control over messaging. Trust is maintained or improved. People can gel as a team, focused on a single, driving purpose: to save the company (along with their jobs and workplace friendships).
Risks are plentiful, though. Loose lips can damage sinking ships. Word of peril leaking prematurely could trigger stakeholder alarms. Meanwhile, management’s under a microscope.
Either Way, Let Staff Know What’s Happening
When assurances aren’t possible, facts give some comfort. Talk about the crunch and why it’s occurring. Not every sordid detail, mind you. Enough to explain the situation (e.g., loss of a significant client created a cash drought, or new legislation puts the kybosh on continuing).
Touch on how daily operations will change. Are cutbacks and layoffs in the works? How will roles and projects be affected?
Make sure to highlight fixes being tried. People handle stress more ably when plans and rescue efforts are primed. At least they’ll know where they stand. Banding together can begin.
Can’t state too strongly the importance of sharing updates. Distressed companies are in fluid terrain. Things can change in a flash. Notifying staff of news quickly shows them they’re respected partners.
Make the flow interactive as possible. Set up frequent meetings with managers. Hold town hall sessions and send email bulletins. Invite suggestions from all employees and respond in a timely way. Let them ask questions. Answer realistically.
If a turnaround happens, fantastic. Otherwise, give employees a fighting chance not to go down with the ship.