JANUARY 13, 2017  In the area of employee benefits, change seems to be a constant. Factors like health insurance costs and regulations regarding employee pay can make it necessary to meet with your team to discuss what may be unwelcome changes to employee benefits.

When the news is positive, such as a pay increase, the conversation tends to be an easier one. It’s when you must inform workers that they will lose employee benefits that the interaction can become awkward and potentially unpleasant.

“Successfully running a business requires balance—whether that is balancing the number of employees necessary to do the work with the amount of money available to pay them or balancing the size of the office space you can rent or purchase with the knowledge that you may eventually need much more,” says Heidi Jannenga, president and co-founder of WebPT, a rehab therapy platform for enhancing patient care and fueling business growth.

When Decreasing Employee Benefits Can Be Necessary

“Reducing and/or freezing pay and benefits is never an easy topic of conversation, but from time to time it can become necessary, especially as the cost of health insurance continues to rise,” says Jannenga. “If you’ve explored all other options to increase revenue without cutting employee benefits and determine that you must proceed, then be transparent, open and honest.”

Jannenga shares costs with her employees, including facts such as how much their health insurance has gone up for the year during an open enrollment benefit workshop they hold for employees each year.

“We have the vendors providing the benefits introduce the new options and discuss strategies for maximizing use. We announce the workshop via a number of channels, including the all-hands stand-up, team meetings, email newsletters and office posters,” she says. “Our HR team also attends each session in order to ensure they fully understand the information and are able to answer questions employees may have throughout the year.”

Encouraging Employee Buy-In

While employees understand the importance of putting the customer first, that concept can be hard for them to swallow when their benefits and/or pay have been reduced, believes Mark Goulston, author of Just Listen: Discover the Secret to Getting Through to Absolutely Anyone. He runs a mentor program for entrepreneurs who want to be more influential business leaders.

“It can be difficult to expect employees to help customers/clients/users to have an ‘abundant’ experience when the employees are coming from scarcity,” he says. “This is especially true when employees feel that top executives are paid so much more than them and are even given pay raises and benefits in the face of poor performance.”

To help successfully present a decrease in employee benefits, Goulston suggests approaching the conversation in the following manner:

“Tell each employee that you’re all in this together. […] Not only may you not be able to give them more benefits and higher pay, you may need to cut both,” says Goulston. “At the same time, you’d like and need their help in getting through this period and still keeping morale up.”

In order to maintain a positive attitude in the office, Goulston suggests asking employees to take the benefits, pay and perks they thought they were going to receive out of the equation and tell you what would need to be different in your company and their position in order for them to say that they thoroughly enjoy their jobs. They may bring up something that you do have control over at this point, such as a change in work hours.

Embrace Conscious Leadership

“People are a company’s best asset, and the way we treat our employees has a direct impact on the success of our businesses and the satisfaction of our customers,” says Jannenga. “The key to running a successful business is embracing conscious leadership. Get employees to buy in to your overall mission and purpose with as much passion and fervor as you do. When employees become stakeholders in your vision and that vision stays steady, it serves as an anchor to keep everyone on board, even during times of change.”

Sharing Good News about Employee Benefits

Of course, telling your workers that you’re able to pay them more and offer additional employee benefits and perks can be a positive conversation that everyone may want to have.

“When delivering good news to employees, also be transparent, open and honest,” says Jannenga. “Your team has earned this increase together, and it should be an honor to be able to offer them more, so be sure to thank them for their hard work, dedication and vision. Your sincere enjoyment at being able to reward their successes will go a long way. After all, your business wouldn’t be what it is without them.”

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