Making the Toughest Decisions:

Making the Tough Decisions:

The current economic crisis has put some producers in a position that they have never before seen…the need to cut salaries or even lay off some employees.  Family businesses tend to have close relationships with the people who work for them due to hiring predominantly local people who are often long-term family friends, the long and irregular work hours, the tough weather conditions, and their closeness to the land and livestock.

There is no formula for laying people off or asking for salary cuts.  Generally, employees want to know that these actions are fair, consistent and well-thought through.  Each situation needs to be fully analyzed and the individuals considered on a case-by-case basis. Here are some “Do’s and Don’ts” for layoffs or compensation reductions:

Do:

·         Be consistent in your reasoning.  If you only reduce compensation or lay off the people who everyone knows you “never really liked” you will lose the good will of your long-term employees.

·         Keep communications open.  Be available to talk to people one-on-one and sincerely listen to their questions and concerns.

·         Provide as much information as possible without making constant revisions to recent statements.

·         When changing your compensation, provide it in writing (with a copy for each person) and explain the duration, the specific changes, and when you expect the salaries to return to previous levels.

·         In most cases, have a group meeting that explains the details with everyone present at the same time.  This limits misunderstandings and helps everyone realize that this is a situation for the entire group.  Keep the meeting very short, very specific, and do not belabor any points—the more ways that you try to explain a situation, the greater the chance for misunderstandings.

Don’ts:

·         Don’t communicate all the changes in a memo without any personal contact.

·         Don’t insulate family members from the cuts…

·         Don’t “communicate by dropping hints.”  Be specific, be truthful, and be clear about the challenges.  People will interpret off-hand remarks in very different ways, so never expect everyone to understand ambiguous references to your situation.

·         For larger organizations, don’t do all of your layoffs at the production level without making some cuts at the management level.  This never goes over well in the community or with the production staff, so provide some balance and at least show how the cuts and “sacrifices” are distributed throughout the company.  Mistakes in this area can have an effect on your ability to hire good people many years into the future.

·         Don’t make the “middle management” explain all the bad news.  This is a time for the owners and upper management people to be taking the lead, explaining the specifics of the changes that will be made, and making themselves available to the employees.

These situations are very rare in agriculture, and my sincere desire is that it will stay that way for many, many years to come.  This is one of those rare occasions that I hope this advice is never needed….

Don Tyler