Yesterday, October 19, Federal Reserve Chairman Jerome Powell admitted that “inflation is still too high.” This comes amid reports that many large banks (especially at Wells Fargo and Goldman Sachs) are reducing their staffs in response. The financial sector is not the only group of industries cutting back, however, as a diverse set of other businesses are doing the same, with thousands of jobs cut by companies including Roku, Farmers Insurance, T-Mobile, CVS, Dropbox, Gap, 3M, Lyft, and many more. In times of economic uncertainty, businesses often face many tough decisions, and unfortunately employee layoffs are a common course of action. While reducing the workforce provides a temporary relief to the bottom line, the move incurs its own significant costs. Let’s examine those:
Declining Customer Service
Quality customer service is paramount to success. We should all hopefully know this. But customer service suffers when the employee headcount shrinks. By retaining your employees, you’re upholding your commitment to your customers by avoiding overworked, overstressed employees, to say nothing of the brain-drain that occurs when you lose your skilled and experienced staff. Don’t compromise your ability to offer an exceptional customer experience, and thereby frustrate your customers—that will inevitably lead to a decline in performance. By keeping as many of your experienced employees as possible, you’ll be able to maintain a high standard of service and maintain your customer’s loyalty even during challenging times.
Eroding Trust
A company’s reputation is one of its chief assets, and layoffs can actually damage it and erode public trust in your business. When you make significant cutbacks, your customers may come to view you as prioritizing profits over people. The kind of perception will have lasting consequences, not only affecting the views of your current customers but also deterring future ones. Social media and online reviews can quickly tarnish a reputation, and so we must all tread carefully. Thus, retaining staff during the pressures of a recession sends a message of stability, care, and responsibility, which can only strengthen your brand in the long run.
Damaging Morale
Lastly, we can’t forget how demoralizing layoffs are for your remaining staff, who will quite reasonably obsess over their own job security. Decreased morale leads to decreased productivity, and often precipitates further turnover as remaining employees start searching for ways off a sinking ship. As the team shrinks, cohesion and synergy also decline, making everyone’s job harder. On the other hand, the companies that find ways to retain as much of their staff as possible are ideally positioned to boost employee morale. Employees who feel valued and secure, especially amid economic uncertainty, are much more likely to contribute to your company’s vision, work collaboratively with their colleagues, and also weather any other challenges that come their way. A resilient staff is a net gain for you.
So, while the knee-jerk reaction for many businesses is to resort to mass, the short-term financial gains will likely result in long-term consequences. Retaining your staff during times of adversity, including seasons of high inflation and recession, ensures your business is well positioned to continue to offer high-quality customer service. In doing this, you’ll be able to protect your business’s reputation and maintain the trust of your customers and your employees alike. In the long term, this will protect and enhance your company’s bottom line, contributing to its resilience, growth, and enduring success. By placing a priority on your retaining your employees, you will emerge from a recession stronger, more trusted, and with higher cohesion.
To offer the absolute highest quality customer experience possible, you need a tip-top staff. The Brandt Group is ready to help you train your employees to be exemplars of both service and sales, providing your customers with thoughtful experiences and your bottom line with higher profits. Let’s chat today about how we can use our powerful mystery shopping tools to bring out the very best in your business!
