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Are We Driving (the best) Half of Our Workforce Away?

Last week was the Vice Presidential debate, and I didn’t watch it. Honestly, I am on a diet, forbidding alcohol, so it was not an option. However, looking at Social Media, my understanding of the debate’s outcome was:

It was a traditional debate; both sides avoided questions, had their talking points, and remained calm.
The Fly Won
Senator Kamala Harris made all sorts of unpleasant faces and was a “b****.”
Vice President Mike Pence talked over Kamela and the female moderator, demonstrating male sexism.

As I didn’t watch it, I have no idea who won; however, many women saw Vice President Pence’s interruptions of Senator Harris sexist norms. Simultaneously, various news outlets reported that Vice President Pence did a great job among many of the President’s supporters. This data ties in with a fascinating paper just released, “Status threat, not economic hardship, explains the 2016 presidential vote,” by Diana C. Mutz, at the University of Pennsylvania. According to Professor Mutz, “Candidate preferences in 2016 reflected increasing anxiety among high-status groups rather than complaints about past treatment among low-status groups.” Thus white males continue to be threatened by other groups diminishing their privilege and claiming to suffer discrimination.

To those who are up in arms so far claiming there is no sexism in the U.S., I would recommend looking at the “Am I the Asshole?” forum on Reddit. The AITA forum provides a thorough look at gender inequality and the degree of sexism in our society. Once you have read this, reflect on what it means for your wife, daughter, and mother. We need to face it and remove it. Adopting the Administration’s stance with its executive order’s stated goal is “to combat offensive, and anti-American race and sex stereotyping and scapegoating,” is just doing more damage and denying reality.

However, being sexist in business and creating an unwelcoming environment for women will not attract more women into the business world. As I discussed in a prior blog post, we need them in business, and we need women more at higher levels of the organization. The data shows that:

Companies with female CFOs improved their earnings;
Companies with female CIOs improved their investment returns; and
Companies with women on their boards performed better.

Furthermore, some claim that countries with women leaders have performed better during COVID, but there is more to that discussion. While this may be a correlation and not causality, it is worth noting. Women also are better at today’s’ leadership requirements, e.g., working in groups and showing empathy. As I said last week, most of our graduates from undergraduate, law, and medical schools are women; to drive them away is just putting us at a global disadvantage.

So, given the above, having more high performing women should put you at a competitive advantage. It is time for what I call the “Moneyball” approach. There is a market of high performing employees who are not valued as highly by your competition. The key is to provide an attractive work environment for them, design compensation to meet their needs, e.g., flexible time, and seek out to recruit them. Building an organization that attracts and retains high performing women at all levels will also attract other women and will provide you with a competitive advantage. We all need one of those in these times.

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Recent Posts

The Downfall of Boeing: A Lesson in Core Values

by Marc Borrelli | Apr 27, 2022

Boeing’s 737 Max issues highlighted the company’s sacrifice of safety for financial performance, resulting in a tarnished reputation. The prioritization of profit over core values also damaged the FAA’s credibility and revealed a lack of accountability for top executives. This downfall serves as a reminder of the importance of maintaining core values and prioritizing them over short-term financial gains.

Resolutions, Here We Go Again.

by Marc Borrelli | Jan 16, 2022

In reflecting on 2021 resolutions, the author scored themselves in three categories and sought to improve success in 2022 by addressing friction points. Drawing on advice from social psychologist Wendy Wood, the author identified areas to reduce or increase friction in their failed resolutions. By making these adjustments, the author aims to enhance their goal achievement and encourages others to consider friction when setting resolutions.

You need to take an extended vacation. No, seriously, you do.

by Marc Borrelli | Sep 27, 2021

COVID has taken a toll on all of us. If you have not taken an extended vacation in a while where you disconnect, you need to now. You and your business will benefit.

Becoming Famous in Your Niche: The Success Story of Linn Products Limited

by Marc Borrelli | Sep 5, 2021

In a previous discussion, I highlighted the importance of being famous for something. Being well-known in your niche can help you: Concentrate on your strengths Connect with your target audience Communicate your offerings more effectively Receive referrals Identify...

Understanding and Optimizing Your Cash Conversion Cycle

by Marc Borrelli | Aug 29, 2021

Understanding and optimizing the Cash Conversion Cycle is crucial for business growth, as it impacts cash flow and the ability to access external capital. This cycle consists of four components: Sales, Make/Production & Inventory, Delivery, and Billing and Payments. To improve the Cash Conversion Cycle, companies can eliminate mistakes, shorten cycle times, and revamp their business models.

Discovering Your Niche: Why You Need to Be Famous for Something

by Marc Borrelli | Aug 22, 2021

As an entrepreneur, it’s crucial to specialize in a specific area and become famous for something, allowing you to generate referrals and build your brand. Understanding the “job” you’re hired for helps you stand out in the marketplace and communicate your value proposition effectively. By providing value to your clients, you can adopt a value-based pricing approach, ensuring your business remains competitive and maintains a strong market presence.

Rethinking Your Pricing Model: Maximizing Margins and Providing Value

by Marc Borrelli | Aug 15, 2021

Rethink your pricing model by focusing on the value you provide and your customers’ Best Alternative To a Negotiated Agreement (BATNA). This approach can help you maximize margins while delivering better value to your clients. Assess your offerings and brainstorm with your team to identify pricing adjustment opportunities or eliminate commodity products or services.

Do you know your Profit per X to drive dramatic growth?

by Marc Borrelli | Jul 25, 2021

I recently facilitated a workshop with several CEOs where we worked on the dramatic business growth model components. One of the questions that I had asked them beforehand was, "What is Your Profit/X?" The results showed that there this concept is not clear to many....

The War for Talent: 5 Ways to Attract the Best Employees

by Marc Borrelli | Jul 4, 2021

In today’s War for Talent, attracting the best employees requires a focus on value creation, core customer, brand promise, and value delivery. Clearly articulate your company’s mission, identify your “core employee” based on shared values, and offer more than just a salary to stand out as an employer. Utilize employee satisfaction metrics and showcase your company’s commitment to its workforce on your website to make a strong impression on potential candidates.

Are you killing your firm’s WFH productivity?

by Marc Borrelli | Jun 27, 2021

Productivity remained during WFH with COVID. However, further analysis found that hourly productivity fell and was compensated for by employees working more hours. What was the culprit – Meetings. Want to increase productivity, have fewer meetings.

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Are we losing (the best) half of our workers?

by Marc Borrelli

The job numbers released last week confirmed what we heard for some time. Women are leaving the workforce in record numbers. According to the jobs report, 865,000 women over 20 dropped out of the American workforce compared with 216,000 men in the same age group. Thus, four times the number of women are leaving the labor market compared to men. Women are bearing the brunt of parenting and running a household while also working a job during the pandemic. The consensus is that even though men are doing more than they’ve perhaps done in any other generation, it’s still not half. The Labor Department finds that married mothers do almost double the household chores and parenting as married fathers.

This environment has created a pressure cooker environment in many households, and it has come to a head with the start of the new school year. As many children stay home instead of returning to school, many women are making the difficult decision to drop out of the workforce altogether. The child care crisis is wreaking havoc on women’s employment.

The new school year has brought it to a head with many children staying home instead of returning to their classrooms in person. And it is forcing many women to make a difficult choice and drop out of the workforce altogether. At the end of 2019, women held just over half of all payroll jobs for only the second time in history. Women now account for 49.7% of the workforce.

This departure from the workforce isn’t just an issue for women, it’s an issue for families, the government, and the economy because women employment it drives GDP.

For women. The longer women are out of the workforce, the harder it is to get back in. Every month and year that a woman is out of the labor force leads to a decline in skills, behind on the latest technology, and increasing the wage gap between others who have been in the workforce.

For the economy. Women are critical contributors to household income. According to many, family finances are going to deteriorate in the immediate term.

For the government. If women leave the labor force, there is a risk that the country will take a step back in gender dynamics, both in the workplace and at home. It will reduce the number of women seeking to enter the workforce in the future, and many will leave due to harmful gender dynamics.

The country’s issue is that today more women (72.5%) are graduating from college than men (68.5%). The effect of this is rippling through the economy; more women (50.5%) are graduating from medical school than men (49.4%), and more women (52.4%) are graduating from ABA-approved law schools than men (47.51%). As a result, we are sacrificing our best and brightest.

Not only that, studies show that once women land leadership positions, they excel, often surpassing men, because they have developed soft skills necessary for effective leadership. Females CFO seems to correlate with high income, female CIOs lead to better investment decisions. Traits like empathy, communication, and listening are qualities that serve women well when in management positions.

Getting women back to work requires long-term thinking about the types of jobs where women want to work. However, according to the Harvard Business Review, misogyny is rampant in the restaurant industry, and we have all seen the stories of its extent in the news and technology industries. Providing opportunities for women in STEM fields will help close the gap and provide more stable employment opportunities in the future. However, individual attitudes will have change.

What does this mean for you? I think the challenge for HR and CEOs going forward is to find a way to provide women a way to keep working and reduce the stress they face at home or offer them a path back in the organization and reclaim their position on the corporate ladder. Those companies that can do this effectively will attract great resources and enable them to get ahead.

Looking at the situation reminds me of Bill Gates’ speech in Saudi Arabia. The audience was segregated by gender, with a large panel dividing the fully veiled women from the men. A participant asked whether the country could realistically become “one of the most competitive economies by 2010.” Gates replied, “Well if you’re not fully utilizing half the talent in the country, you’re not going to get too close to the top.” If the U.S. wants to keep to the top, we have to find a better way to utilize the excellent talent pool we have and not throw a lot of it away.

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Recent Posts

The Downfall of Boeing: A Lesson in Core Values

by Marc Borrelli | Apr 27, 2022

Resolutions, Here We Go Again.

by Marc Borrelli | Jan 16, 2022

You need to take an extended vacation. No, seriously, you do.

by Marc Borrelli | Sep 27, 2021

COVID has taken a toll on all of us. If you have not taken an extended vacation in a while where you disconnect, you need to now. You and your business will benefit.

Becoming Famous in Your Niche: The Success Story of Linn Products Limited

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Understanding and Optimizing Your Cash Conversion Cycle

by Marc Borrelli | Aug 29, 2021

Discovering Your Niche: Why You Need to Be Famous for Something

by Marc Borrelli | Aug 22, 2021

Rethinking Your Pricing Model: Maximizing Margins and Providing Value

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Do you know your Profit per X to drive dramatic growth?

by Marc Borrelli | Jul 25, 2021

The War for Talent: 5 Ways to Attract the Best Employees

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All Employees are Equal; Just Some Feel Parents are more Equal than Others

by Marc Borrelli

Schools are reopening to various degrees across the county. However, these degrees are causing a multitude of issues, and the problem is more complex as the degree is not state by state but in many cases, county by county.

As the schools reopen, we are experiencing everything from virtual schooling to full in-person instruction and everything along the spectrum. Many of the schools with full in-person teaching face resource issues as many older teachers, who are at risk, are retiring rather than working, putting more pressure on the schools’ resources. Besides, while some child care programs are also beginning to reopen, for many, the crisis has taken its toll and will never reopen, aggravating an already strained child care system. To further compound the issue, even if child care and schools do fully reopen, some parents may not be confident in those environments’ safety and opt to keep their children home.

In 2018, over 41 million U.S. workers ages 18 to 64 were caring for at least one child under 18. Of these, nearly 34 million have at least one child under the age of 14 and are more likely to rely on school and child care than parents of high school-aged children. Besides, 70%, or 23.5 million working parents, do not have any potential caregivers at home, and their return to work will likely be dependent on the reopening of child care programs and schools.

However, these parents working from home face an impossible balancing act every day, keeping up with their work while caring for and teaching their children. Others have been laid off, left their jobs to care for their children, or been forced to cobble together temporary child care arrangements to report for work at essential jobs, such as nursing and grocery work. Ultimately, the status of schools and child care programs in the fall will largely dictate the speed and robustness of economic recovery.

Working parents who rely on child care and school also make up a significant share of employees in education, health care, social assistance, finance, insurance, public administration, management, and professional services. In these industries, at least one in five workers depends on child care and schools.

For those working parents, the uncertainty surrounding child care and in-person instruction for school-aged children is unprecedented. As a result, there is an unfolding series of consequences on family life, education, and earnings. The implications for corporate health also need consideration.

Many tech companies have rushed to help their employees, extending new benefits, including extra time off for parents to help them care for their children. However, a backlash has started. Many nonparents of minor children are saying that they feel under-appreciated, as they shoulder a heavier workload, and all the policies are directed to parents of minor children.

Parents of minor children are frustrated that their childless co-workers don’t understand how hard it is to balance work and child care, especially when daycare centers are closed, and they are trying to help their children learn at home. Some say that they cannot get any real work done during the day as they help their children, so they have to work longer at night, resulting in burnout.

The schism has been at the major tech companies, e.g., Google, Facebook, Twitter, and Salesforce. However, it has been most vividly on display at Facebook. In March, Facebook offered up to 10 weeks of paid time off for employees if they had to care for a child whose school or daycare facility had closed or for an older relative whose nursing home was not open. Google and Microsoft extended similar paid leave to employees dealing with children at home or a sick relative. Also, Facebook announced that it would not be scoring employees on job performance for the first half of 2020 because there was “so much change in our lives and our work.” Every Facebook employee would receive bonus amounts, usually reserved for outstanding performance scores. This policy irked some childless employees who felt that those who worked more should receive more pay. Other childless employees felt they should also get the ten weeks paid leave just like parents, creating significant friction. Some parents at Facebook felt negatively judged and that a child care leave was hardly a mental or physical health break. One Facebook parent wrote, “Please don’t make me and other parents at Facebook the outlet for your understandable frustration, exhaustion, and anger in response to the hardships you’re experiencing due to Covid-19.”

Sheryl Sandberg, Facebook’s chief operating officer, was asked on several occasions what Facebook could do to support nonparents since its other policies had benefited parents. Ultimately she said Facebook has tried to design its leave policies to be “inclusive.” “I do believe parents have certain challenges,” she said. “But everyone has challenges, and those challenges are very, very real.”

As a result of the tension, Facebook has had to shut down some internal discussion boards. In August, Facebook announced that the leave policy would remain in place through June 2021 and that employees who had already taken some leave this year would receive another ten weeks next year. This extension further angered some nonparents who feel the company seemed less concerned about their needs.

However, even pre-pandemic resentment from employees without children about extra parental benefits existed. But like all things, COVID has amplified that tension. Parents who had usually been able to balance work and home struggle to help their children learn remotely while still doing their jobs.

Thus, how to deal with this friction? It requires:

Good corporate communication. Erin Kelly, a professor at MIT’s Sloan School of Business, who studies workplace policies and management practices, believes that this tension results from companies failing to do a good job explaining that what benefits parents can benefit the entire workforce. “A question that we might ask the employees who are feeling some frustration about their co-workers being on leave is what do you think is going to happen if that person quits?” she said. “You’re going to actually be stretched further.”
Empathy. A hard trait in our self-centered culture, and especially in many tech companies full of STEM students who have not had to learn compassion. One has to realize it is a difficult situation for everyone, but added Laszlo Bock, Google’s ex-head of HR, “for people to get upset enough to say that ‘I feel this is unfair’ demonstrates a lack of patience, a lack of empathy and a sense of entitlement.”
Core Values and Culture. How does your organization expect you to behave? If your values are only about money, then the friction will get worse. Core values and culture are essential and will be vital in binding the organization together through these times. At times like this, culture truly eats strategy for breakfast.

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Recent Posts

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by Marc Borrelli | Apr 27, 2022

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Burnout! Houston We Have a Problem

by Marc Borrelli

For most of us in an office environment, it is now over five months since we vacated our office and began working from home. While some companies are seeking to have employees return, many are pushing that back until sometime in 2021. Also, in some areas with children returning to “virtual” school,” work from home will continue for a while.

While the data shows that overall productivity is up, what is becoming apparent is that few are taking vacations since COVID hit. According to a recent survey by the global online employment platform Monster, 59% of employees are taking less time off than usual, and 42% of those working from home are not planning to take any time off to decompress. SAP internal data shows employee vacation usage is 4% vs. 24% for the same period last year. For many employees, a combination of cancellation of events, summer camp closures, risks from travel, and minimal ability to travel internationally has led to a deferment of vacations.

However, fewer vacation increases the risk of employee burnout. The recent Monster survey revealed that 69% of employees are experiencing burnout symptoms while working from home, an increase of 20% since a similar study in early May. In addition to the burnout, financial anxiety is also causing mental health issues.

The World Health Organization has updated its definition of burnout from a stress syndrome to “a syndrome conceptualized as resulting from chronic workplace stress that has not been successfully managed.” Three symptoms characterize burnout:

feelings of energy depletion or exhaustion;
increased mental distance from one’s job or negative feelings toward one’s career; and
reduced professional efficacy.

The damage employee burnout can do to an organization is very real. Individual employee burnout reduces productivity. Also, as employees begin to show symptoms of burnout, they transfer their stress (and workload) to others–and the burnout spreads.

With so few employees taking a vacation, issues of what to do are arising.

Give employees more days off during the year, e.g., a Friday a month.
Make employees take staycations?

The odd day off used to be a great break, but working from home, it is just the same as being at the office. So the rest and recharging that it used to offer are no longer there.

Encouraging employees to take staycations may sound good for their mental wellbeing. However, according to an HR Consultant, “The type of staycation where you don’t travel, but you stay home and forget all things work-related for a week feels different when you are working from home. [ The staycation ] is not by choice, and there is a lot of fear, trepidation, and isolation involved. If you don’t have enough space to have a completely separate work from home space, your staycation will feel like you just took a pillow and blanket into your office.”

Finally, some are taking vacations, but not turning off during that time. Since we can all work virtually, they are just continuing to work but at the vacation spot rather than at their home. This type of vacation defeats the purpose and results in the break being ineffective at reducing stress and burnout.

Another issue that is arising is what to do with all the unused vacation time. Many companies that have a use it or lose it policy may find that people lose it during these uncertain times, but that probably increases the risk of burnout. Another large set of companies are revisiting their employee policies to allow for unused vacations to roll over into 2021 so that when things allow for holidays, employees can use them. Right now though 2021 may not be long enough and rolled over vacation is a liability carried on the balance sheet.

Like many things during COVID, the situation is fluid, and flexibility is critical. First, though, find a way to reduce burnout and get your employees downtime. Then you can figure out what to do with vacations.

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Recent Posts

The Downfall of Boeing: A Lesson in Core Values

by Marc Borrelli | Apr 27, 2022

Resolutions, Here We Go Again.

by Marc Borrelli | Jan 16, 2022

You need to take an extended vacation. No, seriously, you do.

by Marc Borrelli | Sep 27, 2021

COVID has taken a toll on all of us. If you have not taken an extended vacation in a while where you disconnect, you need to now. You and your business will benefit.

Becoming Famous in Your Niche: The Success Story of Linn Products Limited

by Marc Borrelli | Sep 5, 2021

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by Marc Borrelli | Aug 29, 2021

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Compensation in a COVID World

by Marc Borrelli

We are all dealing with the impact of COVID. For some, business is soaring, others it is a struggle to survive. Whichever is impacting your business, it will impact compensation planning for 2020 and beyond. As I said a few months ago, your budget and plans as of March should be in the shredder and along with them your compensation structure.

From what I hear, companies are following the courses of action:

Cutting or increasing compensation budgets;
Changing work hours and/or rates of pay;
Indefinitely laying off, or, significant increases in hiring; and
Changing incentive and sales compensation plans (both plus and minus) to retain valuable talent and customer relationships.

So what is your company doing or planning to do? All your employees are wondering and watching, so the sooner you address these issues, the better. Communication is essential, and compensation is all about communication during times like these.

Your Financial Position

How has your business been financially impacted? Managing significant increases in business levels can be as challenging as big declines. Therefore, you need to have realistic forecasts, and an understanding of your ability to pay your employees is critical. Many have taken PPP loans; however, they were a bridge gap, and it looks like the canyon is much more extensive than the bridge. We will be living with the trials and tribulations of COVID for another 12 months or more, so Congress’ eight weeks cover is insufficient.

Review employees and their value to the “new” organization

It is time to review all your employees. Do they fit with the “new” organization and its direction? Many great people have been laid off, sidelined, or are unhappy in their current positions. Thus there is an opportunity to hire better people that would have been unavailable before or people you need to execute the pivot you are experiencing.

Also, look at your employees and determine:

Who rose to the occasion, and who didn’t?
Who has pulled their weight and more during these hard times?
Who has lead and supported others when they were struggling?
Who didn’t?

Now is the perfect time for a talent assessment exercise, e.g., a 9 Box matrix to determine who is performing and their potential in your “new normal.”

Review base compensation plans

How long is it since your compensation structure system was last updated? What data did you use to develop your base pay program? How was that data aged, and to what point in time?

Currently, it’s critical to understand your compensation structure and related pay practices. As businesses adjust to the “new normal,” compensation and pay practices are in a unique position. Some employees will receive a pay rate that is less than what they were making with unemployment compensation, especially with the federal support. Some employees will have received premium pay (e.g., hazard or appreciation pay differentials) because they were “critical workers.” How long will can you support this? How do you communicate with employees if, or when, you stop the premium pay? Since the COVID crisis continues unabated, how do you justify to your employees that they were critical a month ago, but not now, or not in four months when we expect the winter to make the crisis worse? Managing your communication is vital as you may alienate good employees who feel betrayed. Furthermore, realize that employees will have become dependent on the additional income.

The market is providing so many mixed messages about pay structure, that it is hard to know what one should do. Some of the views are:

No need to adjust pay ranges this year, maybe not even next year.
Reduce pay ranges temporarily, at least, which is becoming common, especially if it means keeping staff.
To remain competitive and attract the best talent, you may need to increase your pay ranges.
Those organizations that are reducing staff may need to increase the compensation of remaining employees who will have to take on additional roles and responsibilities.
Those organizations pivoting to new markets, products or services and need new people, what industry norms do you use to determine pay structure?

Salary survey data lags the market and survey data will not be available until 2021 or later. Thus, without reliable data, you need to understand your competitive market for the people you need and determine what you can offer in that situation.

You need to review your employees’ compensation in terms of:

New or fewer responsibilities;
Value to the organization as a result of any changes due to COVID;
Value to the organization as a team player and going beyond, or not reaching, what is required:
Comparison-ratio data (current rate of pay divided by target/market rates) once the revised base compensation structure is determined.

It may be necessary to change starting pay rates for positions and employees in your pay structures. If, however, you are looking to reduce pay, ensure beforehand that you are not stepping into a minefield, and get advice from an HR professional. Issues to be avoided are:

Reducing the compensation of those on contracts with specific payment;
Appearances of discrimination or retaliation; and
Reducing compensation of those on H-1B and E3 visas.

Finally, if reducing pay for existing employees, you need to communicate the changes, what will it take for compensation to return to previous levels. With regard to the trigger event to return pay, it must be something that everyone can see. If not it will seem arbitrary by management and therefore detrimental to morale and performance.

Review incentive compensation plans

With your strategic plan in now the shredder, hopefully, a new one is now ready or on its way. Your incentive compensation plan needs to be tied to your strategic plan to ensure alignment with the organization’s goals, and so incentive compensation should be adjusted annually. However, most companies will have to adjust mid-year as, during this accelerating period of COVID, six or more months is too long to wait.

Examine all your incentive plans and review them to understand all of the plan provisions. You need to stress test plans monthly in light of changing market and financial conditions to evaluate their impact on business and individual employees. The rapidly changing business environment requires careful examination of such plans to ensure they represent the intent of and are aligned with the business strategy.

For those employees who receive a significant portion of their compensation in the form of incentive compensation, there are several factors to consider.

If your business plan is out the window, the compensation targets need to change.
If, due to falling revenues, compensation is likely to drop dramatically, resulting in retention issues, then migrate more to base compensation.
Adjust goals so that there are wins! Incentive compensated employees, usually salespeople, are very competitive. If you remove wins from their life, their performance may suffer.
Those businesses that are realizing a significant increase in activity, incentive compensation is an excellent way to reward performance. However, a best practice is to establish maximum award payout levels as well as performance thresholds, as the increased performance may be due more to unexpected economic forces than the efforts of employees.
If employees are likely to realize unexpected windfalls that are not a result of their efforts, be prepared to make adjustments
Due to the uncertain nature of the economy, revisit your payout schedule to ensure it continues to make sense in today’s environment.
Run Monte Carlo simulations on your incentive compensation plans to ensure that they don’t pose a risk to the company.

However, most of all, communication is key! Communicate clearly, early and often. Managing employee expectations during difficult times is critical. Failure to communicate no matter how good the resulting plans are will cause problems in the organization that could be damaging at times like this.

In case you missed it, communication is key!

Compensation is an emotional issue, and it impacts the lives of all your employees and their families. At this time, everyone is experiencing a great deal of stress:

Is my job safe?
Can my children return to school?
Are my parents safe?
Do I have enough cash to survive?

So now is not the time to add to that stress, as it will sabotage employee performance and thus corporate performance. Communication is essential — it is genuinely all about communication.

You cannot stop rumors and “water cooler” talk, especially in a virtual world. Thus, even if you say nothing, your employees are watching and listening. Your behavior, in the absence of a clearly stated rationale, will drive assumptions about both the organization’s and their own prospects. Many will assume the worst possible scenario.

No news is NOT good news during uncertainty and overly optimistic pronouncements, which contradict the information they see if even worse. Whatever the report, the employees still want to know what their leaders are thinking and doing concerning strategy and tactics. This communication will provide the background to the reasoning involved when making compensation decisions. While they may not agree, they will appreciate honesty and transparency. It will also stop the rumor mill, reduce wasted time due to stress and worry, and provide focus.

Therefore, your managers and supervisors must have conversations with their direct reports on what to expect, what you know right now, and what you don’t know yet.

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