When firing employees is a penny-wise and pound-foolish strategy

Gangadhar Krishna

“Nobody in the organization is going to lose their jobs. We are fine until December 2020.” This was the announcement made in a friend’s office.

When we chatted a few weeks ago, the only topic of discussion was COVID-19, job loss, pay cuts, forced leave, bad times, recession and depression. The mood was pretty somber. But one friend who seemed less stressed had a different tune. ‘Nobody in the organisation is going to lose their jobs. We are fine until December 2020’. This was the announcement made in his office.

Now I knew why he was less stressed. With jobs falling like nine pins, he was better placed.

He said the entire office was now focusing on collections on one hand, and holding on to existing customers on the other. I am sure employees did not have to look over their shoulders, and on the sly apply for jobs on various social media sites. Instead, they focused on work and ensured the company does well so that, they had a job on 2021. The company was not aiming to make profits, but to get past COVID-19 unscathed and reboot in 2021 — a simple, realistic and clear vision of the organization.

The formula seemed straight forward. A win-win approach. On one side, employees were at ease about their jobs but on their toes striving hard to keep it running. The carrot and the stick were both at play. And on the other, they were in touch with customers either for business or collections. Maintaining relations with customers is imperative for the future of the organization.                             

Integrity works two ways

Every organisation is talking cost cuts and retrenchments. While, only a few are thinking of investing at these times. Organisations are busy quick-fixing instead of coming up with long term solutions. The exodus of migrant workers a couple of weeks ago and now the dearth of them to resume business is clear evidence of betrayal.

Business owners have amassed enough wealth to have taken care of their work force for three to four months. If only they were benevolent with their employees, the state and Centre could have focused on other challenges and progressed. Instead the workers were left on the streets.

So much for ‘we are like a big family’ gyan usually given by management to employees. If they were part of your big family, would you throw your kith and kin on the streets? Or would you try to take care of them, come what may? And so, the laborers, seeing the true colours have left for their villages to be with their ‘real families’. And now employers may have to source local labor, possibly at a higher price. A penny-wise pound-foolish strategy.

These are combat times of a different nature and requires every individual, every community and every organization to support the government by doing their little bit, and not the other way around. A time when ‘each one, teaches one’ about the risk, hygiene and social distancing. Illiteracy has not created this mess, the educated demonstrating a sense of apathy has done it.

– President John F Kennedy (January 20, 1961)

Motivated employees satisfy customers

This is the time to maintain status quo and not rock the boat. In a panic mode, it is not enough that the management has a vision, but every employee must see the vision and contribute in meeting it. Simply put, if everyone sees what’s in it for them, they will do their bit to contribute towards the vision. It is a time when it is wiser to inform and inspire than to instruct or command. Employees and their suggestions that were once unheard or unappreciated could now come to limelight, heard and implemented. It is the time to inject renewed energy and enthusiasm, focus on doing things differently with all attention on the customer and prime objective to win together.

Time to invest

Jan Carlzon, in his book ‘Moments of truth’, speaks on how he turned around SAS airlines not by cutting costs, but by delivering the best service and increasing their market share. Today, we need to retain customers and employees, so tomorrow, we can move full steam ahead.  The need of the hour is not on cutting costs but investing on anything, I repeat anything, that will help retain customers and keep the business alive.

If you see your business going online, invest in developing a seamless online presence. If you need to review processes, invest in developing processes that work proactively. If service deliveries need change, invest in new delivery methods. If employees need training to meet present challenges and get ready post-COVID-19, then invest in developing their skills. In fact, Dubai has invested in a drive-in theatre in the last 60 days, just to make sure the show goes on and customers are kept entertained.

And in India too, I gather from various social media, that the age-old neighborhood kirana stores have started or may, I say invested, in home delivery service. An investment at these times not only benefited the business, but have given them the much-deserved goodwill. Now this will become their new norm post pandemic. And what is their ROI (Return on Investment)? Along with goodwill, they have increased their customer base, gained customer loyalty and earned a feather on their cap. While many kiranas have never been in favour of tying up with Ecommerce, this will confirm their thoughts and beliefs. Many customers would realize their folly and return to kiranas. Loyalty works two ways.

It is wiser to retain than retrain

Adopting short sighted labor policies, an organization would certainly benefit and maybe even tide the pandemic. But then what? When the pandemic is behind us, in two months or twelve months, how is the organization going to revive and compete? Would you call your old employees back? Even if you did, would they return? And, even if they did return, having seen your true colors, how productive would they be? How loyal would they be? So, the obvious solution is new hires, retrain and start where you left. And all this comes at a cost that could have been wisely avoided.

What about customer service and customer experience? Can a lean team perform just as efficiently as a fully charged and well-trained team? Customers quickly sense the difference in service and would not think twice to move elsewhere! Once again acquiring a new customer is seven times costlier than retaining existing customers.

It then, makes sound sense to retain your employees than retrain new ones.

It makes sense to retain customers than acquiring new ones.

And in doing this, the organisation gains goodwill of the employee and its customers.

This may surely mean a strain for the organisation, but a huge comfort for the employee and for your customers. And in the long run, it is the organization that will triumph. Past these challenging times, you can once again sit on your laurels and run your business while your employees run the show.