There is no worse day in an agency owner’s life than when we have to lay off staff. Letting someone go because they’re doing a lousy job is tough but letting someone go because you don’t have enough income to keep them is a horrific day.

But it’s one of the most important (and often ignored) business decisions we are sometimes forced to make. There are ways to handle it that are better for all concerned. If you have to do it — do it well and with kindness.

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Hey everybody, Drew McLellan here from Agency Management Institute. This week I am coming to you from the city of brotherly love, Philadelphia. Unfortunately this week I've had have two separate conversations with agency owners who find themselves in a really uncomfortable position, because of client cuts, having to cut staff. And you know, there is not a day in agency life that an agency owner dreads more than the day they have to lay off staff. Especially when the staff has done a good job, they've been a good member of the team, but the reality is because of something that's happened inside the business often times that a client has moved on, the agency just can't support the work staff that they have and they have to make cuts. So there are some ways to do that in as humane and kind a way as possible, and I just want to review a couple of those things. Number one, many of us think we should do that lay off as late in the week and late in the day as possible. Many agencies go to do a lay off or staff cuts on Friday afternoons, and that's actually the worst day possible. You want to give that employee, or those employees, as much of open window of time to actively do something to sort of get their career back on track. So you want to give them a chance to file for unemployment, to start trolling on LinkedIn, to follow up with some resumes going out, maybe even they set up some introductory interviews. It's tough to do that on a Friday afternoon. Typically, if we're going to lay someone off early in the week, we give them much more runway to start actively doing something about getting another job. When we wait until Friday afternoon, they have all weekend to do nothing but sort of brood and wait. So that's not a healthy thing to do to your employee. Another question I often get asked is, should I lay off two or three people if I think I really have to cut five or should I lay off one and hope that things get better? And the truth of it is, that's really damaging to your culture and to the employees that remain. If it's sort of a death by a thousand cuts. So as best you can, you need to estimate what you really need to do to reduce staff for the next three to six months and do it all at once. It's painful but it's better to do it in one fell swoop than to do it and have everybody waiting to see if you're going to do it again and then do it again. And the last thing I'm going to tell you is, some agency owners have asked me whether or not it would be better to furlough their employees meaning I'm going to let you loose for 30 days or 60 days, but if business comes back we'll bring you back or to lay them off. And well, it feels better to us to furlough an employee, to promise them sort of a hope for the future. The reality is, we're sort of putting them between a rock and a hard place. So you're far better off if you need to cut staff, to do it completely, to set them free to find a new opportunity. So, don't tether them to the shop or a hope that you might bring them back. If down the road you land a client or something happens and they're still available, by all means pursue them. But if you're going to let them go, really let them go so that they can start fresh as quickly as they can. Agency lay offs are a reality in our business and unfortunately when we lose a big client it's really the only way for us to mitigate our expenses enough to keep the agency in a healthy place. We have to do this with as much humanity as possible. Not only for the people that we're letting go but also for the team that we are keeping. You want to be able to hold your head up high to know that you did your very best, that you were as kind as possible and that you did it in a way that sets those people up for as much success as quickly as possible as you can. Hopefully this is not an issue you're going to face soon, but if you do, I'm hoping that you can do it in a kind way. I'll talk to you next week.

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