Dear Dr. Debra,

I own a company with about 20 employees. Although we, like other companies, have been hit by the recession and our sales are down, we are still profitable. In addition, we have cash reserves, and a good relationship with our vendors due to years of timely payments to them.

The problem is my employees are fearful of layoffs, even though I reassure them. I want to head off potential problems caused by fear and stress from the economy. Do you think it’s better for me to give a lunch for the group and talk to them, or speak with each person individually?

Concerned Business Owner

Dear Concerned Owner,

First of all, I want to commend you on excellent management practices in two areas. 1. Running your company in a successful manner that will allow your business to ride out the recession. 2. Concern for the emotional needs of your employees.

It’s difficult in this climate of national economic insecurity to not give into the fears of financial disaster. Economic problems are very real right now. (I’ve certainly counseled far too many employees at companies going through layoffs.) However, economic concerns are also hyped by the media. So, when you’re surrounded by bad news, it’s easy to get caught up in the fears and anxieties of others.

The truth is, while profits may be down for most companies, they are still secure. And most Americans (who want to) are working.

Some of peoples’ fears of layoffs come from the (unfortunately true) horror stories, where management denied rumors of layoffs instead of giving warnings about the company’s financial difficulties. Then the announcement of the layoffs was dropped on employees with no warning. Perhaps the front door of the firm was locked, or the employees were told that was also the last day of work. Plus there’s little or no severance.

These stories lead to a lack of trust in the words of owners and management. This is where your personal integrity and history with your staff comes in. If you’ve acted consistent and truthful with them in the past, they will be more able to trust you now.

I suggest you hold both a group luncheon and individual meetings with your employees. In your group lunch, share the facts you’ve written me about the health of your company. Perhaps show some charts or graphs so the information is visual, not just auditory.

I’d also take the time to touch on what employees can do to feel a stronger sense of personal control.

People who’ve cut down their expenses, paid down their debt, and increased their savings feel more secure than those who continue to live a less frugal lifestyle. These people also tend to feel less anxious if they are laid off because they know they can weather the time between jobs.

I suggest you say something such as, “I’m not telling you how to live your lives. However, the more you are careful about managing your finances, the less stress you’ll feel. I know in my life, I’ve cut back on my spending, paid down my debts, and increased my savings. So if I read something in the paper about the economy that scares me, I remind myself that the business and my personal finances can weather this recession.”

The other thing that makes staff feel better is if they can cross train. Learning new skills makes them more valuable to your company and gives them more expertise to put on their resume if they ever need to search for a new job. Give your employees chances to learn other skills, both at work and through educational opportunities.

As for your individual meetings, I’d hold them after your group meeting. Use the time to ask each person if he or she is feeling better, although don’t pry into personal lives. At that point, an employee might choose to open up and tell you some personal concerns—a spouse that’s out of work, an elderly parent she now has to take care of due to the loss of her investments, a friend who’s laid off and has lost his house. In your conversations, reiterate your commitment to keeping your staff intact.

If you have an employee assistance program, remind your staff to utilize that resource. Most EAPs have online articles on stress reduction, including economic stress, and provide individual, relationship, and family counseling—both with a 24 hour hotline, and referrals to local counselors. In addition, some EAPs offer limited financial and legal counseling. Interactions with the EAP are confidential. The employer is not informed of a staff member’s use of the EAP.

Hopefully this will reassure your employees and keep the morale of your company healthy.

Dr. Debra

Debra Holland, Ph.D., is a licensed psychotherapist who specializes in relationships and communication techniques.

Feel free to write Dr. Debra with your questions.

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