Over the last several weeks at Northstar Ventures we’ve had to trim our costs and hunker down just like so many other companies. It’s been a gut-wrenching process. We’ve trimmed our staff by 35% and it’s not been fun for anyone…but it’s especially painful for those who end up on that chopping block.

As a CEO, the hardest part about making layoff decisions is trying to set aside emotion and make decisions based on performance and quantifiable value. I’ve found that in times like these, it actually becomes quite apparent who on your team is vital and who can be let go without much negative impact to the business.

Whether you are the decision maker about “who stays and who goes” or if you’re worried about ending up on the chopping block…here are some things to consider:

• Top sales people stay. They keep fuel in the engine.
• Unless paid on 100% commission, mediocre sales people who barely or rarely meet quota must go; now.
• Management team members should only stay if their departure would cause the company to falter substantially. Otherwise, it’s time to say goodbye. One big salary can pay a lot of bills.

• In a season of deep financial concern and widespread layoffs, those who remain should also sacrifice. Trim remaining salaries by at least 5%.
• If you almost fired someone in the past, then they should be near the top of the list when considering layoffs. Unless they’ve made a dramatic improvement, they’re gone.
• Marketing assistants (and assistants in general) are targets. Any worthwhile Marketing Manager (or Managers in general) should be able to absorb the tasks of an assistant until the situation improves.
• Employees who have done a good job of pointing out and proving why they are a resource that you can’t do without should survive if at all possible. You want useful fighters in a time like this.
• Employees who are barely noticed are usually barely noticed when you let them go.
• Don’t underestimate creativity. A reduction in time or pay from three people can equal a full headcount reduction. Find out what people are willing to do before making final decisions.

In July, 2007, Inc. Magazine surveyed business owners on the topic of downsizing. I thought some of the results were insightful:

“Who did our respondents fire? Well, it didn’t always pay to be close to the boss: 12% fired their secretaries or assistant.

The most fired department: Sales and Marketing. Other endangered staff members, IT Specialists, Project Managers, and ironically, the Head of Human Resources.”

My friends, this is most definitely a season of change. It’s a season of scarcity and real lives are being affected.

In the end, these times make us stronger and new opportunities are created. In the end, we’ll be better for it.

Until then….Bosses, chop carefully, thoughtfully, creatively, and with compassion.

And to those who are worried about being chopped? Get out there and do everything in your power to drive sales or become a part of the business engine that’s expensive and difficult to replace. Be the transmission.

Check out this great post for more information about this topic:

10 Tips for Downsizing with Grace in Difficult Economic Times

Top 7 Survival Tips to Deal with Downsizing in the New Economy

Tags: Business, business coaching, business tips, chopping block, downsizing, entrepreneur, firing employees, layoff, Marketing, sales, Small business tips, who to fire, who to layoff

This entry was posted on Thursday, January 15th, 2009 at 5:00 pm and is filed under Business, Business Plan, Entrepreneurship, Marketing, Work Ethic, company culture, entrepreneur, sales. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.