Holt Electric closed its seven retail showrooms when the coronavirus pandemic hit in March, but it kept the employees who staffed them.
Instead of helping walk-in customers find the right tool or part, eight salespeople are now working in accounting, shipping or other departments.
Ryan Holtzman, third-generation chief executive of the St. Louis electrical supplier, never considered layoffs even as the company lost between 18% and 20% of its revenue. (The majority of its business comes from wholesale deliveries to contractors.)
“Our attitude was if we can afford to do it, let’s figure out how we can keep everyone,” Holtzman said. “If we can come out of this intact, we will be better prepared when business is going to come back.”
Holtzman subscribes to a people-first management philosophy preached by Clayton consulting firm Chapman & Co., a unit of industrial equipment maker Barry-Wehmiller. Chapman emphasizes principles such as shared sacrifice, creative problem-solving and clear communication with employees — ideals that are tested when times get tough.
Sara Hannah, a Chapman co-founder, cringes when she hears about firms laying off workers via text message or form letter. Layoffs may be necessary, especially for stores or hotels that have been forced to shut down, but they should be a last resort and should be handled humanely.
“Our take would be to do anything possible to protect your business, but also protect the people who built the business in the first place,” Hannah said. “We don’t separate the two.”
Matt Whiat, Chapman’s other founding partner, said the firm’s practice can be as simple as reminding managers of the golden rule. “It’s really not different from getting kindergarten kids to all play nice,” he said.
Clients also need specific advice, though. Shared-sacrifice measures — such as salary cuts, job sharing and short furloughs for all employees instead of layoffs for some — become important in times like these.
Bob Chapman, Barry-Wehmiller’s CEO, recounted in a 2015 book how the company survived the 2008-2009 recession by asking employees to volunteer for time off without pay. He launched the consulting firm to spread his leadership principles throughout corporate America.
Jeff Winters, CEO of Sapper Consulting in Kirkwood, drew up plans for pay cuts when the coronavirus outbreak began. He knew from working with Chapman & Co. that he’d better tell workers exactly what sacrifices he might ask for and why.
“What they counseled us to do was, first of all, transparency,” said Winters, whose 110-person firm generates sales leads for companies. “We were forthright about the good, bad and worst scenarios.”
Sapper’s business held up pretty well, so Winters was able to reverse the pay cuts. He’s noticed that his workers are more motivated and productive, even as they’re all working remotely.
Winters thinks transparency made a difference. “It’s gone a long way toward continuing to build our culture,” he said. “This will be a defining moment for us.”
At Holt Electric, Holtzman does daily conference calls with all 72 employees. Like Winters, he thinks the crisis has strengthened workers’ bond with the company.
“We’ve never talked as much as we do in those calls,” Holtzman said. “It’s been kind of a reset to realize that how we treat each other matters.”
Humane leadership during a crisis can also help with future recruiting, Whiat says. For a long time, prospective employees will want to know how companies reacted to COVID-19.
Those that laid off people via text message won’t have a very good answer.