In this economy, many small businesses face the unfortunate decision of having to let staff go. This is hard in any size company, but can feel overwhelming in a small business with a family-like culture.
My client called the other day with this very paradox, having to choose between two extremely talented staff members, who had also become very close friends after many years of working together. She felt a lot of anxiety, because she knew that she would not be happy with any outcome, since both staff members were smart, hard working and loyal. But she wanted to be fair. Here is what I recommended:
- Define your current and future business needs.
Staffing decisions need to be made based on the work of the present and future, not on the past. When markets shift significantly, businesses often have to do things very differently in order to survive. So get crystal clear on the actual work that needs to be done to achieve desired business objectives, in as much detail as possible.
- Define the specific skills, capabilities and knowledge needed to deliver desired business results.
You want to approach this exercise with real objectivity, thinking about the actual needs of your organization. So for a moment, forget about any of your existing staff, just think about what would be the ideal set of skills and capabilities required to deliver your business objectives. If you need some models, look on job boards that describe qualifications for similar positions.
- Compare the desired skill sets to your existing staff, and see who fits the best.
This is where you have to be exceptionally careful to not let your personal feelings cloud your judgment. You need to choose the staff that will allow your business to not only survive, but also thrive. Someone who has worked with you for a long time may be really hard to let go, but if they don’t have the skills required to meet the needs of your future business, you will put everyone at risk.
- Make your decision, and share the reasoning.
While it may be a very difficult message to hear, you owe it to the employees you are letting go to tell them how you made your decision. When you have done a really good job defining your objective criteria in steps 1 and 2 above, this conversation will be much easier. This will dispel any feelings that you favored one employee over another based on their golf handicap, or the fact that they are married to your daughter or son.
- Do everything in your power to get your former employees back on the road to employment.
Just because you let staff go does not mean that you need to cut off all communication and friendship. There is a tremendous amount you can do to help them find new work, including getting the word out to your existing network, hooking them up with a career coach or resume service, or sponsoring an affordable class to re-invigorate their skills. A manager interviewed in the New York Times wrote recommendations on LinkedIn for all laid off employees, which will reflect very positively to potential employers.
- How do you know when you have made a good decision?
It will never feel good to lay off valuable and treasured staff. But by making your determination with objective criteria based on true business needs, you will know that your decision is fair.
Pamela Slim is a business coach and author of the upcoming book Escape from Cubicle Nation: From Corporate Prisoner to Thriving Entrepreneur (Portfolio, May, 2009)