Small-business owners face many tough problems in a troubled economy. One of the most difficult challenges can be managing a staff through uncertain times. Whether it's a matter of keeping anxious employees focused on their work or making hard decisions about layoffs, company owners often find themselves wondering what the best steps may be.

Below are some suggestions and guidelines from the Connecticut Society of CPAs.


If the business is experiencing financial troubles, the news will probably have already spread through the company grapevine, so don't try to pretend that everything is rosy. Instead, be upbeat and realistic in your dealings with employees. You might acknowledge that the company has lost a big client, for example, but point out the other steps you are taking to adapt to changing times and find new opportunities.

This will reassure employees that the company leadership is dealing with the problems that you face, and make it easier for them to concentrate on their jobs, rather than worrying about the business's survival.


Your employees are well aware of all the problems that a downturn can bring. That's why it's a good idea to remind them that a recession also provides many potential opportunities. Salespeople might be able to pick up new clients when competitors cut back operations or shut down, for example. Employees who manage vendor relationships may find it easier to cut better deals on contracts, as well. Consider brainstorming with your staff to identify all the opportunities open to your company and develop ideas on how to make the most of them.


If overtime and long hours are a normal part of doing business at your company, then a slow economy can provide some needed downtime for hard-working staff members.

Instead of allowing employees to become anxious about the downturn, encourage top people to take the vacation time that they have accumulated or to use slow periods to catch up on worthwhile projects that often get pushed to the back burner in busier times. Once again, you're taking a consequence of the bad economy and finding a way to turn it into a benefit for the company and its employees.


Cutting back on staff when business is slow can be a wrenching decision for company owners, especially when you know employees will have a rough time finding new jobs.

Dropping down to a smaller workforce may also leave you at a disadvantage when the economy turns around. That's why it's a good idea to examine all your options. Salary, hiring and benefits freezes, for example, can prevent increases in expenses. Salary cutbacks can make it possible to hold on to the same number of people for a smaller outlay, as can furloughs, in which employees are given days off without pay. By taking these steps you can maintain the same experienced workforce and help keep your staff off the unemployment line.

Provided by the Connecticut Society of CPAs. Reach them at or at (860) 258-4800.

(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.

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