Anytime the economy is struggling, including inflationary times, it’s perfectly normal for leaders to look at downsizing their organizations.
Right now we’re seeing massive layoffs in the tech sector, at entertainment companies in Hollywood, and major retailers. So it’s not a surprise that many pastors, ministry, and nonprofit leaders naturally think this is a good time to cut back on their staff.
But before you reflexively let people go to help save money or weather the crisis, here’s three important thoughts to consider:
- When you downsize, you’re losing talent. Keep in mind current employees know their jobs, know the organization’s culture – and in churches, they know the congregation and people they serve. Once the crisis is over, you’ll be rehiring people who don’t know the culture, and have little to no idea who they’re serving. Ramping back up will take time and be expensive.
- Survivor guilt is real. It happens to people who are able to keep their jobs when others are cut. The problem with survivor guilt is that it can hurt the team’s motivation and devastate morale. It can also damage personal relationships between longtime friends and associates and can radically change an organization’s culture.
- Restaffing is expensive and time consuming. Eventually the crisis will end, and you’ll start growing again. But new employees have to be selected and then trained. Recruiting good people takes time, and training takes even longer. And during that period, you’ll be operating at less than your best.
Obviously if you have under performing employees who are hurting the organization, then a crisis might be a good time to make those changes. I’m a big believer that leaders need to be vigilant about failing employees. But with a good team that may be difficult to replace, I suggest you explore every possible alternative to keep from decimating the staff.
The downside of downsizing staff
Recently, the Wall Street Journal reported that “If you look at the science over the last few decades on downsizing, you look at thousands of firms that downsized, you compare them to peer firms that chose different ways of managing costs, like for example taking pay cuts, and the researchers conclude that downsizing is, quote, ‘dumb and dumber.’ It predicts consistent and significant decreases in profits, return on assets.”
I’ve seen churches and ministry organizations who cut too quickly and too close to the bone, and it took years and sometimes decades to correct the mistake — long after the crisis was over.
Don’t make that mistake.
Use a crisis to rethink priorities, strategy and planning, but don’t be too quick to cut the people who have made you successful in the first place.