As businesses experience a drop in sales, they are forced to cut their expenses in order to maintain solvency. One of the main places to cut is labor, which is usually a company’s first or second highest cost. The Wall Street Journal has a couple of interesting articles about our current, rising unemployment numbers. The U-6 unemployment rate hit 12.5% while the more traditional rate currently stands at 6.7%.
As Christian business owners, we’re in the same boat as anyone else running a business: we must cut costs in order to remain solvent. I’ve been laying off people in my own business, something I had hoped to avoid. How we layoff our people is important, so I’ll offer a few ideas:
- Be direct and honest. When you lay people off, don’t beat around the bush. Being direct and honest shows them respect.
- Offer them some type of outplacement service.
- Be sure to pay them their severance, on-time and any remaining PTO and benefits they might have accrued.
- If it helps, write them a letter of recommendation indicating that their position was eliminated and that the layoff wasn’t due to poor performance (if this is true)
- Realize that God has something in this for them too.
Remember that as stewards, we’re charged with running our businesses in a profitable way. Going into debt to pay people’s salaries is not good stewardship. Businesses are not charities. So steward your business, perhaps consider taking a pay cut for yourself and keep your employees as long as possible. But if you have to lay them off, do it in a way that preserves their dignity and your relationship with them.