Christians in the business world want to apply their Christian values to their work but worry that competition will compete based on different criteria. When COVID hit, many of my small business clients asked if it was Christian to lay off employees. Am I going against God if I have to do a layoff? Am I not trusting the Lord? Am I responding out of fear, which we are not commanded to do?
Even as many made it through the pandemic, recession fears have plagued the last half of 2022, leaving these same business owners concerned about what to expect in 2023. With headlines of publicly traded companies laying off thousands, the question has resurfaced:
Is it Christian to lay off employees?
Are We Trusting God When We Lay Off Employees?
We can follow our Christian values in our business just like we do in all of our life. However, we must distinguish between truth and myth when doing so. One of the myths is that if we are good Christians, we will never fire or lay off an employee.
Applying a one size fits all rule doesn’t make sense. God doesn’t want you to risk your entire business and livelihood to keep 100% of your employees if the company can’t support everyone or if you have poor performers.
However, as Christians, it is consistent with our values to consider all factors before deciding. Just because there is a pandemic doesn’t mean we will reduce our workforce. Likewise, because inflation is hurting the economy doesn’t mean we will be hurt too.
What to Consider When We Lay Off Employees?
I am not the morality police, but I can share the process I have gone through and have advised others to follow in these situations.
I still remember vividly when the Governor of Louisiana came on the news and announced a statewide stay-at-home order for all citizens. That order meant staying home from work, school, church, and social outings. So my first step was to ensure our team had what they needed to work from home. We had never done this before, but being the nature of our business and the advances in technology, it was indeed possible.
Since we coach and support small businesses across varied industries, our clients had to make similar arrangements and decisions. Some clients did have a knee-jerk reaction and laid off staff immediately. Others waited to see what happened when they really couldn’t afford it.
Our business grew as we were able to assist our clients in navigating their circumstances with the shutdown.
Now with a recession looming, although the situation wasn’t as dramatic, the impact on the economy and specific industries has been profound.
So what should we do? I suggest the following steps to evaluate your situation:
Assess Your Business and Personal Financial Situation
If you have significant cash reserves, minimal debt, and other sources of personal income, you can carry your team through if they are all performing well. However, if you have been barely profitable, to begin with, burdened with debt, and your industry is hit hard, keeping everyone may be difficult and could jeopardize all of your employees if the business doesn’t survive.
Analyze Your Business for Other Efficiencies and Cost Savings
It is only prudent to look at other expenses to cut first before we lay off employees. We all have a little fat in our budgets, and this is the time to take a hard look at everything. However, there is only so much expense to cut before the cuts affect the execution of your business. Which affects your revenues and, therefore, creates a downward free fall.
Aggressively Look for Revenue Growth Opportunities
I have written many articles about the opportunities for small businesses in a down market; here are a few:
Strategies for Small Businesses in a Changing Economy
Persevering Through Business Downturns
What to do When Business is Slow
But, we are small businesses, so we almost always have a small market share in our current market. But, even if the entire market shrinks, we can gain more market share and new customers by ensuring premium customer service and continued quality of products and services.
When we cut our staff too much, providing premium service and products is at risk. Our competition will likely slack during these times and provide us the revenue growth opportunities.
Pray About Laying Off Employees Before Considering It
Usually, the tactics above take time, and with the news and the consumer’s response to the information, it is normal to be nervous about waiting too long to make decisions on staff. We should always pray. God is the one in control. God cares about our business. When we pray and look to the Lord for our direction, He provides.
A favorite verse since day one of my Christian walk has always been Proverbs 3:5-7:
Trust in the LORD with all your heart, and do not lean on your own understanding. In all your ways acknowledge him, and he will make straight your paths.
Be Decisive – Employee Layoffs Are Stressful to All
Information and analysis help the decision-making process. First, we need to gather, evaluate, and pray, but then we must act decisively. As the leader of our companies, when we don’t, we spread fear. Employees assume and speculate when things are in limbo or decisions are drawn out too long. They have to make sure that their family is provided for and may decide to leave for a more stable opportunity. And, of course, it is usually the most capable that has many options.
And, if a team is in fear, they can’t focus as well on the essential things during these times, which are excellent execution, wow customer service, and internal team support and stewardship.
If Lay Offs Have To Happen, How Do We Decide Whom To Lay Off
I knew a business owner with such compassion for his team that he couldn’t lay anyone off. However, his business was under such revenue pressure, he had extensive debt, and his industry was shut down. In the end, he closed his business as carrying the team without the revenues to support them drove him into bankruptcy.
Given his circumstances, I don’t think that was wise. In the end, in trying not to lay off employees, all his employees lost their jobs, and his family was impacted substantially.
If wisdom and business survival prevail, here are some considerations when making layoffs:
- Lay off poor performers rather than strong performers, regardless of how long someone has been at the company.
- Lay off the least needed positions before laying off roles critical to quality execution and revenue growth.
- Lay off the most negligible value i.e. if the highest paid but equal performance, reducing the higher salary may help you not eliminate fewer positions. However, this would be a lower priority in the decision-making.
- Lay off the newest employee if salary and performance are equal.
How We Handle The Lay-Offs Illustrates Our Values
I think our Christian values are relevant to how we do this. If layoffs must happen:
• Be decisive, upfront, and timely in the process.
• Treat each person respectfully and communicate in person if possible.
• Provide references to assist the employee in getting another job.
• Make calls on their behalf if you have a network of other relevant employers.
• Bring them back when and if you can.
It isn’t easy, and we can often find ways to avoid it. But I do not believe the answer to the question, Is it Christian to lay off employees? is a universal “no .” Instead, I think we seek God and follow him in our process to determine wise business decisions and practices.
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