According to PKT’s Michael Tio, employers undertaking cost-cutting measures in trying times must explain the company’s plans and assure workers that their interests will be taken care of in due course. JOY LEE writes.

KEEPING staff morale up during tough times is a challenge faced by most, if not all, businesses.

All that gloomy talk about the economy can bring any spirit down, especially when discussions gravitate towards cutbacks in year-end bonuses and increments. Maybe even job cuts.

But engaging your employees and communicating the company’s situation openly can help maintain staff morale, says Datuk Michael Tio, chief executive officer of PKT Logistics Group Sdn Bhd.

“Overdoing cost-cutting measures might affect staff morale. But if you can provide them with a good explanation, I think they would be able to accept it. People generally don’t want to see their company fail,” he suggests.

Tio says it’s important to maintain morale and a positive working environment to ensure that the company does not lose good talent because of a temporary challenge in rewarding staff.

“You need to communicate with them correctly so that they can also adjust their own budget and expenses because they will be affected. Some might be planning to make purchases with their bonus, but now they may have to postpone it,” he says.

However, having understanding employees does not mean employers no longer have to look at motivating or rewarding them.

While companies may need to conserve cash to sustain the business, Tio says employees must be assured that they would be rewarded for staying with the company through thick and thin.

In PKT’s case, Tio explains that while the company declares a certain amount of bonus for the year, it will pay out only a portion of it first to conserve cash. The remaining sum would be paid once the market turns. But he stresses the importance of employers fulfilling any promise made regarding bonuses.

“We need to explain all this to them. We don’t want them to misjudge our decision.

“A lot of SMEs do not engage their employees, which is wrong. We say employees are the company’s biggest asset. So how can they not know what is going on in the company and how can employers not be accessible to them?” asks Tio.

He encourages SME employers not to remain in their “ivory towers”. In the current economic situation, management should be on the ground and be close to their employees, he says.

“Modern CEOs are more approachable. People cannot accept that they cannot communicate with their CEOs. So we are becoming a new breed of employers. I want to inspire a new breed of entrepreneurs to be close to their employees. Employees are your asset. They take care of the company and they take care of you,” says Tio.

But while employers should be open about the company’s circumstances, Tio notes that employers should not just emphasise “negative talk”.

“Don’t only engage your employees when you want to tell them bad news. And don’t always talk about bad news only. You should create a positive environment in the company,” he advises.