Keeping Your Employees During Chapter 11 Bankruptcy
Handling your employees properly during Chapter 11 bankruptcy is essential if you want to retain the best and brightest workers for your business.
Below are a few tips on how to retain employees during bankruptcy:
- Open the lines of communication and always be honest with your workers about the bankruptcy. The worse thing an employer could do during bankruptcy is to breed distrust amongst their employees. If you don’t keep employees informed about the bankruptcy process and how it will impact them, they will most likely listen to the rumors.
- Pay your employees on time. While bankruptcy can cause some employers to lose their bearings a bit as they try to tackle their financial issues, paying employees late can prove disastrous. Bankrupt companies must make sure that employees never get the feeling that they are not going to get paid, and paying them late will foster that negative belief.
- Make sure that employees feel as secure as possible. If you know that you’re going to have layoffs, let the employees know about it and tell them how the layoffs will be determined if possible. Now you may say that telling your employees about future layoffs during bankruptcy could increase feelings of instability. That’s simply not true. Most intelligent employees know that layoffs and bankruptcy often go hand and hand, if they know the process it will be a little bit easier to handle.
- Offer bonuses to your most valuable executives. This strategy has been used by Borders, GM and other bankrupt companies fighting off “talent vultures” who are trying to pick off valuable employees. If you want to retain your core group of top employees during bankruptcy, then you need to do so with incentives such as bonuses.