Keeping employees happy during hard times

It’s hard to avoid the bad news these days-the stock market falling towards zero, home prices declining, homelessness rising, our spending power being chipped away.

In your business, it’s more important than ever to paint an optimistic yet realistic future for your employees. Now is the time that you need good people by your side the most; now is the time you need them to accept less and work more; now is the time for real leadership.

At Fluidesign, I’ve hard to make some hard decisions the last eight months. From a peak of 22 employees we’re now down to 12. In 2008 we had our both our best month and worst month in history (how’s that for volatility!). I decided that the only way through this recession was to lay it all on the table. Here’s what I did.

Open the Books

Once a month, I sit down with my team and show them everything – income statements and balance sheets (minus individual salaries) are distributed and everyone is free to ask anything they want. If you’re going to ask your people to take a hit, you better show them where the money is going.

Be Transparent

Your employees are smart, and they understand the current reality. Tell them everything – celebrate the wins (briefly) and be honest with them about the current risks.

Celebrate Everything

I was spoiled before, and it took a $100k+ deal to really get me excited. Today, we celebrate $5k and $10k deals as if they were $50k and $100k deals. Even in rough times, your people need to feel like there’s progress being made (and, frankly, so do you).

Go Virtual

For the first time in our history, we’re considering having our team work from home. We’d still maintain a sales office and conference room, with a common area where people would come and go as they please, but at a fraction of the cost. I was surprised to find out that the majority of my employees actually want to work from home because they feel that it’s more productive.

Find a Release

Your mood and your whims are an important psychological barometer for your company. Especially right now, it’s more important than ever to find a release once a day. Work out. Get a massage. Drive down the coast. Go on a date. Do whatever you need to – to relax and zone out for an hour. I exercise every morning before coming to the office, and that helps me manage the stress around me infinitely better. This rubs off on my employees.

Be Flexible

If you need to cut costs, first ask your employees if they’re interesting in working part time. Or ask if they’re in a position to forego some salary now for stock options, or perhaps a pay raise later. Be creative – if someone really believes in you and your company, they’ll work with you. Work with them back.

As my friend Cameron Herold recently said to me, “don’t let a good recession go to waste.” Now is the time to build trust and reinforce your relationships with your employees. Once you come out on the other side, the camaraderie and trust you’ve created will pay you back in spades.

Michael Schneider is the CEO of Fluidesign, a Los Angeles-based interactive agency. You can learn more about Michael at

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