Companies across America today face one of the most difficult challenges in business: telling thousands of employees that they no longer have work.
At a national level, waves of pandemic-driven layoffs are adding up to an economic catastrophe. At a human level, however, every employee takes the news as a personal blow. It is therefore imperative that these companies get the message right. No matter how tortured the explanation, announcements must truthfully address the necessity of organizational survival and the ultimate objective of preserving as many jobs as possible.
Above all, companies must show that they — and their senior executives — are committed to easing the burden on everyone. The pain of financial retrenchment must be clearly borne by everyone in the organization, from top to bottom.
So how do CEOs put pen to paper? In practice, a cross-disciplinary team of Human Resources, Legal and Corporate Communications must craft these critical messages for their organizational leader. Here are some key considerations:
1) Don’t delay
Companies owe their employees clarity. The sooner their job status is confirmed, the sooner workers can apply for unemployment benefits under the CARES Act. Delaying the communications to explore last ditch bank financing, for example, is a short-term strategy that only blocks employees’ access to these benefits thereby adding to their pain.
2) Language matters
A timely announcement is critical but be careful with the message. The availability of federal assistance is worth noting, but it’s not the point. Companies need to express compassion and hope. Danny Meyer, CEO of the Union Square Hospitality Group, may have struck the right balance in his recent statement to employees:
“Never could I have fathomed a time where the only path forward would be to lay people off so they can receive unemployment, while this company fights to see another day…”
3) Manage the message
Whether the CEO issues a memo or a letter to employees, the announcement will be widely circulated. It will trigger a response from a broad cross section of stakeholders, including politicians, regulators, unions and the press. Each of these audiences will require a strategy. Tesla, for example, shared its employee memo with CNBC which published the full text on the business channel’s website and even included a “sidebar” video on the company’s ventilator production initiative.
Other companies that take a more neutral approach to the media should consider sharing their communications. At a time when press releases are not appropriate, the language and information contained in employee announcement should drive all other public communications.
Of course, no matter how well the message is delivered, critics will emerge.
When Macy’s announced furloughs of its workforce, its corporate communications team was ready to answer labor union demands for better benefits and compensation. In a statement, Macy’s confirmed that the company followed “appropriate steps” and pledged to continue communications with the union.
4) Share the pain
Executive compensation and staffing represent another component of the announcement. Management should consider taking pay cuts to show solidarity and sacrifice. To date, more than 70 U.S. corporate CEOs have reportedly announced they will take full or partial cuts this year. These include such leaders as Oscar Munoz of American Airlines and Park Hotels & Resorts’ Thomas Baltimore, according to Equilar. When Simon Property Group announced CEO and Chairman David Simon would not receive a salary and upper-level executives would take a 30% pay cut, the press coverage was favorable.
5) Communicate meaningfully
For businesses battling to survive COVID-19, an ongoing and proactive communications plan is critical to sustaining loyalty. Many firms have already rolled out a regular schedule of updates to furloughed employees.
Still, communications must be meaningful rather than trivial. Treating it as another brand-building opportunity or a new way to apply video meeting technology can do irreparable harm to the brand and corporate reputation.
As the pandemic and its economic fallout continue, more companies will be forced into difficult decisions that will have a profound impact upon their employees. Meanwhile, employees will struggle to stay healthy and fight the pandemic. Their safety and survival — as well as the unavoidable tragedies of the COVID-19 contagion — will make humane, honest communications even more critical in the months to come.