Bob Chapman, CEO of the manufacturing company Barry-Wehmiller, faced both of those terrible words daily in 2009 as the financial crisis was beginning to wreak havoc on small business owners.
After orders dropped 40%, he had to cut labor costs by $10 million or face shutting down. His board thought layoffs were the only option, but Bob Chapman innovated a better solution.
He told his employees, “It is better we should all suffer a little than any of us should suffer a lot,” and he refused to lay off a single person. Then he enacted a furlough policy that required every employee, from the newest hire to the CEO, to take a mandatory 4-week unpaid vacation during the coming year.
The company didn’t save $10 million—it saved $20 million—while also drastically increasing morale and posting record profits in 2010. When the recession ended, the company emerged stronger than it had ever been in its 130-year history.
Bob Chapman found success in a bad situation by thinking creatively and putting his employees first. He’s a great role model for small business owners.
Source: https://moneyhabits.ozk.com/2017/10/17/when-you-put-people-first-profits-will-follow/
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