Eenie Meenie Miney Moe, All That Budget Has to Go

Any person working in corporate America has been faced with either the reality of budget cuts or the perception that maybe cuts are coming. As a leader, you know you have to decide what will be cut first and that ulcer you had in 5th grade when Jenny wouldn’t hold your hand at recess starts bubbling and tearing open in your gut again. So, when the threat of budget cuts is looming like a rain cloud over your Florida summer vacation, what do you do? The whole ostrich stick your head in the sand plan sounds comfy but there is no escaping it – you planned on that budget and now poof, abracadabra, it’s gone. Unless you have that money tree growing in your backyard my mom always referenced when I was a teenage girl and wanted money for shopping, then you, too, have to find a way to make it work.

As a career People Industry professional whether I was in HR, Corporate Culture, Development, or Recruiting, typically I’ve been the first to know about these cutbacks (insert my ulcer gurgle here). Leaders usually think HR is the David Copperfield of the budget world – we can magically materialize a bazillion dollars of spending that can be cut without any impact to the people, productivity, morale or business’ goals. Abracadabra! I’ve heard “make a list – we have to find pieces of the pie we can cut out” dozens of times in my career. Want me to tell you a secret? There is always one place that seems to get cut and I always try to keep my eye rolls to a minimum because it is the absolute last place organizations should cut first: humans. If they don’t want to cut headcount they want to cut development and training. Bold move. Let’s see how this story plays out for you business leaders...

Remember those choose your own adventure books? Let’s play that game. Here are your optional endings to this storing – choose your path.

Adventure Option 1: Cut headcount to save money

Pros: It saves the company money. Hooray for you. You save money on toilet paper with fewer humans in the office. Success. You “may” be able to get rid of dead weight that is disengaged and costing your company more money than their ROI. Actual pro. Kudos.

Cons: Losing people, whether strong or weak contributors, impacts culture, remaining employee productivity, & morale not to mention how your customers and clients perceive you. Someone liked at least one of the people you let go (I’m almost certain at least ONE person liked crazy Susan who microwaved fish at lunch daily). Probably. Hopefully. I’m guessing even an underperformer did “some” work daily – where does that get delegated now? And what about the people left with the extra workload? Is there an overtime cost or will you have to hire temp labor? How do those getting the overload work feel about it? Do they feel invisible and now overworked?

Adventure Option 2: Cut training and development

Pros: It saves the company money. Hooray for you again, you can do subtraction. That’s pretty much it. Good cost savings.

Cons: People, today, more than ever, value continued development in their roles, careers, and organizations to the tune of it being up to 75% of the reason people stay with an organization in some cases. You cut that to save the company money and the message you’ve just sent all your people is “money was more important to someone high up looking at the P&L than your learning and earning capacity as it relates to working here with us.” Hey, but don’t leave us for a new job because we didn’t cut headcount, remember? You should be THANKFUL all we cut is your development budget and not your job (woosah Christie, woosah, inhale, exhale, smile, keep blinking, keep breathing or you may use words that would make your preacher father very disappointed in you.)

Now’s the time for us to pull our skinny ostrich necks out from the hole in the sand – our people are (wait for it, this is revolutionary) they are real live people. The second any company begins seeing them only as numbers, as cost or expense, as red vs. green, that’s the moment the slippery cost savings slope becomes that really scary downhill speed skiing race that I watch during every winter Olympics. Once you’re on that slope going 135mph in the downhill direction of not caring, all it takes is one tiny little crack in the snow on the mountain to send you flailing like a ragdoll head over toes into the plastic boundary fence while the announcers gasp and your skis and poles go flying.

Now, let’s pretend this third scenario - all of the organization’s business leaders have done absolutely everything in their power to cut where they could and they’re being told to cut deeper. What do you do? You manage the absolute hell out of that communication and change, not as business leaders, but as people. Leaders are still people unless there has been some alien invasion I’m blissfully unaware of. Here’s my handy dandy list of how to handle cuts and how to do your best to make sure people are not treated like cattle going to slaughter.

Communicate early, often, and with full transparency. DO NOT, I repeat with a megaphone, DO NOT start reviewing cut backs and let something leak (because there is ALWAYS a leak) and then impact the culture, perception, feeling, and productivity of people before a decision has even been made. If a department, person, or line item is even being considered as a part of cuts, look them in the eye and tell them. (I know a lot of people won’t agree with me on this one but I promise you, I don’t care. People are people first – treat them like real live breathing individuals with families, mortgages, puppies, kids in college, a daughter getting married, a parent in assisted living they are paying for. Treat them with compassion and care.)

Think of the displaced first. Yes, I know, this is backward because you’ve laid them off and you have a business to run. But, remember that whole “they’re real live people” thing I said? Do what you can to help their lives continue with the smallest speed bump possible. Before any layoffs happen, engage the support of and create a process with placement firms, especially those specializing in the lines of work in which the layoffs will impact. Provide those you are letting go with a written list of contacts, processes, and areas of specialization so they can immediately move into the next step and begin their career search with help.

Remember the survivors, too. Ever watched an episode of the TV show Survivor? That whole “the tribe has spoken” moment when someone is voted off doesn’t only impact the person going home. Watch the faces of those remaining on the show – there is always one crying, one in shock, one needing a hug, one secretly celebrating, one breathing a sigh of relief it wasn’t them, and one that thinks they’re next. This is a great time to revisit #1 of my list – communication. The survivors will have concern for themselves first, then their team, then the overall health of the company. Respond accordingly. Don’t give them a bunch of cliché corporate jargon. TALK to your people like they’re your best friend Claire in high school talking about why you so cannot even believe Jenny wore her Whitesnake jacket the day after you wore YOUR Whitesnake jacket. Thankfully your bestie Claire gets you and even though she secretly thinks you’re a little crazy for what you’re saying, she trusts you. Help your people trust you even if what’s happening currently or next is crazy, scary or confusing to them. Tell them what they need to know about their role first, then their team and finally the company and what else is in the future. Be transparent – like Windex on a sliding glass door.

Finally, for the love of all things holy, do not cut training and development. You can reduce it a little temporarily if you communicate why the reduction in spending is happening and the timeframe to the people in your organization, but if you cut training and development completely and permanently, you might as well buy stock in TiVo as your financial growth strategy. I may be *slightly* partial to employee development because that's the whole purpose of my company, but pay no attention to my bias. The impact training provides to not just your employees, their growth, their productivity, but also to your customer satisfaction, brand reputation, consistency in service, and beyond, well that’s a cost you absolutely cannot afford to cut. In fact, give them more money because they can train people to do work more efficiently, with greater accuracy and job satisfaction which in the end will save the company money and help grow that revenue number!

My final thought for you today if you are working for a company that may potentially be in this position: take your red Swingline stapler, hide in the basement, and hope payroll makes a mistake and keeps paying you.

Christie McPherson, Founder & CEO of AIM Advising

Christie is a 10+ year professional in recruiting, leadership, culture development, and talent growth through learning. The self-proclaimed “funny girl” has a refreshing take on true authenticity in her work and life. Christie is casual, real, and engaging. Her career experience in a variety of industries and organizations worldwide allow her to have a thought-provoking perspective on who she seeks to help in her work through AIM Advising – people just like you.

Christie writes and speaks about what’s truly broken in the people business and what we can each do to improve it, no matter our role. Follow her on Twitter or connect with her on LinkedIn. You can also follow her company, AIM Advising, on Twitter and Facebook. Christie also welcomes you to email her directly – she loves people otherwise she’d be the first to say she’s in the wrong line of work! Email her at [email protected]