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Retaining Employees After Layoffs

Your remaining staff is picking up the slack, but you can't afford to pay them more. So how do you keep them happy?

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Q: I have recently had to let a few people go due to a slowdown in our business. This has put an extra load on the remaining employees. How can I keep them motivated? I can't really afford to pay them more.

A: You are certainly not the only one with this problem. It may not make you feel any better, but this is a common management situation today.

First, you do not have to pay your employees more money to keep them motivated. Something that many managers don't understand is that money is not the thing that motivates people on any given day; they are motivated by what happens to them on that day. Most employees understand the economic bind that companies are in now. If you read the newspapers or watch TV, you have to know that a great many businesses, large and small, are struggling for survival. Only employees who are very secure in their jobs (have another job waiting or have daddy's money) would dare ask for more money, no matter how much more they are asked to do. However, even though you don't have to pay more now to keep them motivated, if business turns around, the prudent and fair thing to do would be to give them more money then. The real question then becomes, "What do I do in the meantime?"

If people are asked to do more, they will feel good about it if they get something in return. During the recent dotcom boom, managers thought they could handle this problem with things like stock options and various delayed-payment schemes. When the bust came, people felt they had been duped because they had worked long and hard for large future payoffs, and the stock turned out to be worthless.

Get your company through any layoff with Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalizing Downsized Organizations by David M. Noer.

When I talk of getting something in return, the things that work best are to make sure employees are not only told they are appreciated, but that it is demonstrated by management actions everyday. While this may seem overly simplistic to many, I assure you it is not. One of the worst feelings you can have at work is to feel that no one appreciates what you do. An old saying I quote in my book Other People's Habits is, "If people are not told overtly and clearly that they are appreciated, they will assume the opposite." Everyone knows this is true, because everyone has been in a situation where they've felt that hard work and extra effort were not appreciated.

There are three things that you can do that will go a long way toward keeping morale high even when you cannot use cash:

1. Listen to them. Take some time each day to talk to employees about what they're doing. Give them the opportunity to tell you what they did, how hard it was and how they went about solving a problem or achieving a result.

2. Tell them. Tell employees their work is appreciated. Tell them clearly, and tell them often.

3. Show them. Take the initiative to do things that are unexpected. Bring in food. Take them out for lunch. Let them leave early. This is particularly effective when people have completed a difficult task or solved a difficult problem.

There was a song that was popular when I was growing up called "Little Things Mean a Lot." This was never more relevant than it is today. Remember, these ideas are not a substitute for paying people fairly and equitably, but when put into practice, in good times or in bad, they will make people feel they are valued and valuable.

Aubrey C. Daniels, Ph.D., founder and CEO of management consulting firm Aubrey Daniels & Associates (ADA), is an internationally recognized author, speaker and expert on management and human performance issues. For more about ADA's seminars and consulting services or to order Aubrey's book Bringing Out the Best in People: How To Apply The Astonishing Power of Positive Reinforcement, visit, or contact Laura Lee Glass at (800) 223-6191 or

The opinions expressed in this column are those of the author, not of All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.

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