Sign up for Funding Circle newsletter!
Get our latest news and information on business finance, management and growth.
Updated: November 18th, 2020
In an ideal world, you would never need to deliver bad news to your employees. Your business would always function precisely as it should, keeping up with goals and projections, and each night you’d get to sleep easy.
Unfortunately, sometimes even stellar businesses can’t keep things picture-perfect. While no one wants to deliver difficult news to their employees (like a layoff or a down quarter), it’s important to approach the topic with honesty, transparency, and empathy.
Here are four steps to take when breaking bad news to your employees:
It may be good to fill in your senior leadership about what’s going on prior to the official announcement, but don’t give out this information to everyone else piecemeal — get all your employees in a room together and make sure everyone finds out at the same time.
Otherwise, this is how rumors get started, which affects your team’s focus and productivity. Avoid the anxiety of people being unsure of what’s happening. If you don’t have a standing company meeting scheduled, throw some time on everyone’s calendars as soon as you can.
There’s a time and a place to be positive about the state of things, but this may not be the time to try to shoehorn in platitudes.
It’s understandable that you want to explain why this news isn’t that bad, but realize this could be difficult news for many people, so don’t try to downplay their concerns.
Avoid making jokes or snarky remarks — you may be trying to lighten a heavy mood, but it will just look like you aren’t taking the problem seriously, and you could lose your employees’ trust.
Let people know what will happen in the coming hours or days. Will you speak to each employee individually to let them know how their specific role will be impacted? Is it business as usual this month? Have you upped production demands? Make sure people walk away from this meeting with as many facts as possible — otherwise, people may panic and fill in the blanks on their own.
Make sure employees know who to consult if they have any additional questions. Is it your HR team? Their manager? You? If you don’t provide an outlet, employees will confer with each other — which may lead to rumors, miscommunication, and an inaccurate understanding of what’s happening.
Delivering bad news is no leader’s favorite activity, but it is a key part of creating a trusting, transparent environment. Executed well, you’ll walk away with your employees’ respect — which is one of the most valuable aspects of your company.
Paige Smith is a Content Marketing Writer and Senior Contributing Writer at Funding Circle. She has a bachelor's degree in English Literature from Cal Poly San Luis Obispo, and specializes in writing about the intersection of business, finance, and tech. Paige has written for a number of B2B industry leaders, including fintech companies, small business lenders, and business credit resource sites.