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Should you tell your employees you’re struggling financially?

On Behalf of | Apr 17, 2022 | Bankruptcy |

You’re a conscientious employer and have been for years. You pay a fair wage and ensure a comfortable working environment. In return, your employees work hard for you.

Through no fault of your own, your company is struggling financially. You’ve had to adapt, make cutbacks, and streamline over the past financial year, but it’s still not enough to get you out of the red. Part of you wants to shield your employees from this stress. However, there is also a large part of you that says you should be fully transparent about your financial struggles. Which is the best choice to make?

Fair warning gives employees a chance to act

Communication has been one of the keys to the success of your business, and this doesn’t need to end if you are struggling. You owe it to your workers to keep them in the loop. You’ve hired people who have considerable skills. Your team may be able to help you find a solution.

Even if this isn’t the case, a fair warning gives your workers a chance to make plans. If hours are to be cut, they might be able to get a second job. If positions are to be sacrificed altogether, then you can give them the notice required to find something else.

Your loyalty fosters loyalty in return

Letting your employees know what’s going on is a sign of respect. It shows that they are valued and that you trust them in full. Loyal staff may be willing to take a pay cut until you can dig your company out of trouble as a team. A long-term employee might even be willing to invest in the company, giving you an innovative solution to the problem.

As a business owner, you value the employees who have been by your side throughout, and this feeling is mutual. There are many options available to you if you are struggling financially, so be sure to explore the possibilities at your disposal.