Communicating with employees in difficult times
It is clear at this point that Canada's economy is in a recession—I don't think we need to go over the numbers anymore. It is even basically clear that our government is doing something about the situation. But what is far from clear for many people is the effect that this economic climate is having on everyday Canadians, and how they should deal with it; and we have seen surprisingly little guidance in this area. As a result, many Canadian workers are panicking or worse, which can have numerous detrimental effects on individuals, their workplaces and the workforce in general.
When employees feel insecure, they are more likely to feel anxious, stressed and to experience low morale, which can reduce productivity, initiate physical and mental health problems, increase absenteeism, and lead to workplace conflict, possibly even violence. Any of these things can cost a company dearly; a combination of them could be a disaster.
On the other hand, according to Hewitt Associates' 2009 Best Employers in Canada study, engaged employees are healthier, more productive, show lower stress and work overload, and are less likely to quit or take sick days; and the companies for which they work are better prepared to face significant business challenges.
Communication is key to engagement, especially in difficult times.
In other words, without communication, workers have no way of knowing whether their employer is likely to survive the recession, and they will often fear the worst. For this simple reason, it's a good idea to let your employees know where your company stands (and where they stand) and what's going on in terms of coping with the economic downturn.
Our last HRinfodesk poll asked: Have you communicated with your employees about the impact the recession is having on their workplace, and what your strategies and cost-saving measures are? Our poll results indicate that most companies have got the message that communicating is crucial. Out of 216 respondents, 123 said that they have communicated with their employees about the state of affairs (56.94%); and 29 said they plan on doing so in the near future (13.43%). Combined, that's a clear majority, at slightly more than 70 percent. On the other hand, 41 participants said they have not communicated the issue (18.98%); while another 23 said they don't think it is necessary or it doesn't apply to them (10.65%). That's nearly 30 percent with no plans to discuss things with their employees.
A recent Hewitt Rapid Response survey of 192 companies found similar results. One-third of respondents indicated that they had no plans to communicate their strategy to their employees. Sarah Beech, a principal with Hewitt, notes, “Whether or not layoffs are planned, the silence is very likely causing employees to be apprehensive, decreasing their productivity and engagement.”
Further, for the most part, those companies that are talking to staff are addressing general business issues, instead of specifically reassuring employees about their jobs, wages and benefits. Beech notes, “this communication void is bound to raise questions in employees' minds.”
What to do?
Even if there are no apparent signs of trouble, it may be important to communicate with employees. Regardless of how well your company is performing during the downturn, and how secure jobs at your company are, your employees will have ideas of their own that you cannot control. And all of the doom and gloom coming from the media, combined with silence from the head office, is likely to lead to negative thoughts in your employees' heads.
Certainly, many companies are already discussing important issues with their employees, but even these proactive employers must determine if what they're saying is what their employees need to hear, and adjust the message if necessary.
Once you determine whether you need to communicate, you've got to figure out what to say and how to say it. Your workplace will require its own unique message or even messages designed for different departments or groups of employees.
What to communicate
What is your company going through? What cost-cutting measures are you implementing? What sacrifices will you be asking of your employees?
According to a December 2008 Watson Wyatt Worldwide study of companies in the United States, employees are most concerned about (in order of importance): job security; company performance and solvency; bonuses or other incentive pay; customer impact; benefit programs; and base pay.
In addition, a recent study by Shepell-fgi, Canada's largest provider of employee assistance programs, found that personal financial problems are causing great anxiety for Canadian employees, driven by concerns about falling pension values. While these concerns relate only partly to the workplace, they are causing employees great stress that they bring with them to work.
It should pose no problem for most businesses to prepare some sort of employee communication that covers these issues, and it seems that many have. However, the survey also found that while most participating companies had communicated on these issues or were planning to in the near future (77 percent), the majority of those (80 percent) had focused on company performance and solvency rather than the whole field of issues; and only 38 percent had communicated about job security, the most important issue to employees.
In addition, if you are planning on letting employees go, or have already done so, you will have to tailor your communications carefully. A recent Ipsos Reid survey found that, while 24 percent of Canadian workers feel like they might lose their job at any time, in companies where layoffs had already taken place that number jumped to 48 percent of employees. And these fears weren't confined to the “shop floor”. Employees at all levels share concerns about the status of their jobs.
Layoffs may be necessary, but companies do themselves a disservice by failing to inform or reassure remaining workers. JB Aloy, an Ipsos expert on employee relationship management notes, “In recessionary times, it is even more important to harness the creativity and resourcefulness of your people to get through the tough spots, but keeping productivity and efficiencies high is challenging when employees fear the worst.”
The same survey found that more than half of employers had not communicated about their situations to employees, and among those that had, employees found the message ineffective as often as not.
Shepell offers these points to consider:
- Within the organization, actively promote your EAP's proactive, financial counselling and consultation services.
- Engage your employees by creating a quality work environment. This involves a high level of communication, employee participation in decision-making, and management/supervisory styles that support employees and are based on trust, respect and fairness.
- Understand the very real connection between healthy, productive employees and lower costs for disability and absenteeism.
Annie Waite, Editor of Internalcommshub.com, a global employment communications network, offers this advice on what to communicate:
- Be clear and consistent on the situation the organization is in and what is being done about it. Make sure employees know what they can do to help and what's expected of them.
- Continue to communicate the company's vision, strategy and progress to show that leadership has a long-term plan.
- Ask employees for their ideas on things like maintaining engagement, winning new business or reducing costs.
- Celebrate successes, however small, e.g., keeping or winning business, receiving thanks from a customer, overcoming challenges, winning awards, passing exams, and so on.
Some companies may find it a large step to accept ideas from employees, but it's just that sort of initiative that will engage workers and make them feel like they are adding value to the company.
How to communicate
According to Sandra Robinson, management professor at the University of British Columbia and an expert on employee relations, workers and bosses enter into “psychological contracts”, which can be damaged by lack of communication during periods of organizational change, such as economic crises. That is, while an employer may abide by the employment contract, employees may feel nevertheless that the real or perceived changes they are facing and the demands their employer is making of them are unfair and constitute a betrayal or breach of contract.
This idea is interesting and may help employers understand why, despite their efforts (if any), their employees feel insecure about their positions. Without targeted communication, employees may see their employers' actions as the bare minimum. Conversely, Robinson notes, “people can cope with unfair outcomes if they know the process leading to that was fair”.
For these reasons, deciding the medium for employee communication in difficult times and going ahead with it may be at least as difficult as determining the message. How do you figure out whether employees will be satisfied with an internal memo or email, or if they need some face time with management or higher-ups? This may depend on your company's actual situation; what measures you're taking to support your staff and business; how you have communicated with employees in the past; whether layoffs are forthcoming; feedback from employees, or many other factors.
Allman Communication, a British corporate communication consultancy, has developed a strategy for employee communication in tough times. The first steps are consistent with the “what to communicate” advice above; here are the “how to communicate” steps:
- Undertake a communication channel “health check” to see what is working best for employees
- Consider switching from high-cost channels, e.g., conferences, printed publications or mailings, to lower cost ones, e.g., town hall and face-to-face meetings and intranets
- Ensure all scheduled team briefings and communication meetings are maintained to demonstrate business as usual and to avoid creating a vacuum or room for speculation
- Ramp up use of “quick” listening channels, e.g., walkabouts, focus groups and pulse surveys
- Ensure your leaders and line managers have the required capability to communicate effectively with their teams
- The key to this is to communicate, communicate, communicate and listen, listen, listen
- If leaders and line managers lack the information or capability to do this, they should be trained immediately
This is a general strategy that could be tailored to most situations; but in the specific case of impending layoffs, Watson Wyatt advocates a before-during-after approach to employee communication. This means employing a comprehensive strategy to inform and support employees throughout the process of layoffs.
- Prepare leaders early
- In the initial stages, let leaders deliver key messages about business conditions and actions
- Make sure that front line managers take on the initial message and communicate directly with employees
Pam Rollins, a consultant at Watson Wyatt notes, “front line managers play a key role in making it easier for employees to understand and accept key business decisions”.
- Clearly communicate with employees the rationale for layoffs, without avoiding the tough questions
- Keep the process transparent. Transparency is critical to maintaining trust. Employees leaving the organization will want to know what support the company will provide them and hear that their service has been valued, while employees remaining will want to know whether their own jobs are secure.
- Refer to and apply any existing employee relations strategy or policy. It will help if in the past you have consistently applied or at least communicated such a strategy.
- Ensure that messages to both terminated and remaining employees are consistent with the rationale for those layoff decisions. This will go a long way toward preserving leadership's credibility.
Rollins says: “Employers will not have answers to many tough questions during a restructuring. … However, they can share information about how the decisions were made, give details about when more might be known and reinforce these messages on an ongoing basis.”
- Communicate a vision for the future, with the aim of engaging remaining employees
- Deliver messages about the organization's long-term vision, clarifying how the employees can contribute to it and setting up realistic expectations for sharing information and available support going forward
- Highly engaged employees are more resilient during times of change and will drive performance in critical times
Of course, these steps could be modified to apply to any major change situation, not just layoffs.
What does all of this mean for employers?
I can't imagine that any company would say that it hasn't been affected by the current recession in some negative way. And anywhere negative business effects are taking placeeither directly or otherwisenegative ideas are bound to enter into the minds of employees. As a result, it is imperative for employers to talk to their employees to assuage their fears and reassure them about their status and the company itself.
Surely, nobody wants to spread the bad news about layoffs, wage or benefit reductions, reduced work arrangements, or worse; but failing or hesitating to do so will only worsen your situation, even if there is no really bad news to spread. When left in the dark, employees will often fear the worst, which can lead to anxiety, stress and panic, and reduce productivity, creativity and efficiency, and subsequently lead to health and well-being problems. Employees may even consider leaving the company if they receive an offer from a company they perceive to be in better shape. Certainly, none of these outcomes are desirable, especially in a time when companies need all the effort and creativity they can get from their employees, and top performers are even more crucial to success than ever.
Trust, credibility, loyalty and engagement are key matters that can be supported and enhanced by communication, but it is up to each company to determine what form their communications will take and to make their messages as effective as needed.
The good news is that when companies do communicate, especially when they do it well, they can create a healthy, productive, creative and positive environment, where employees feel valued, want to work and put in the effort to maintain or improve the company's performance.
Communicating With Employees During the Current Financial Crisis, Watson Wyatt Worldwide, December 2008, www.watsonwyatt.com/communicatingfinancialcrisis
Employee Communication In Tough Times, Lesley Allman, Allman Communication Ltd., February 2009, www.allmancommunication.com/allman_communication_news.asp?tabId=4
Financial Distress Impacts Health and Productivity: Employees Turning to EAP for Help, Shepell-fgi Research Group, 2009, www.shepellfgi.com/EN-CA/AboutUs/News/News_and_Media_Releases/media20090224.asp
How do I keep up morale in a down market?, Mary Teresa Bitti, Financial Post, March 2, 2009, www.financialpost.com/story-printer.html?id=1343218