How to Not Layoff a Worker

Last week, my mother was laid off from her “very” part time job at a non-profit organization. Mom had started working there 25 years ago after the kids were nearly grown, working part-time to full-time as needed. Mom built her life around her job and made many close friends among her coworkers with whom she spent a lot of time off the job.

After many years and many budget cuts, Mom was now the only remaining person working in her department who performed her specific duties. Although she was paid to work only 12 hours a week, Mom put in an extra 12 to 20 hours per week in volunteer time doing what she truly loved. She liked to joke that she was “cheap” labor.

On top of Mom’s volunteer contributions, she also supported the non-profit financially, buying gifts for all of us at Christmas from the non-profit run shop and donating money to special programs.

Mom assumed her job would always be safe. She was sadly mistaken.

Her employer, the non-profit, held a meeting one day where they told their shocked and dismayed staff that all part-time help and some full-time help would be “separated.” Mom tried to negotiate even fewer paid hours via her supervisor, who told her that the “powers that be” were not interested. She was told to pack up her personal things and collect her last pay check.

“But, you’re welcome to continue volunteering,” said the receptionist who handed her the check. “That’s the plan – to shift most of the work to volunteers to save money,” she said.

“Humph!” said Mom as she boxed up all the materials she had purchased with her own money and not sought for reimbursement.

Mom wasn’t upset that there was no warning. She was upset that the decision to lay her off was all done out of her control; that the method seemed cold and inhuman; and more importantly, that it seemed unnecessary. She loved her company, loved her job, and would have gone right on putting in tons of hours for free if she’d felt respected. However, she felt she was being treated as a Social Security number, just another “part time” status employee sent to the slaughter house – and not treated the way she saw herself – as an intelligent and important, incremental part of the non-profit’s operation.

Mom decided she would eventually go back to volunteering, but at the competing non-profit instead.

I told my mother that her old employers are idiots.

On March 20, 2003, after several months of threats to invade Iraq and take down Saddam Hussein, President G.W. Bush ordered the “shock and awe” bombing of Iraq.  We were now going to war.

Just like so many Seattle-based businesses around me, my own business came to a screeching halt. Since I extended credit and billed my clients after the work was done, I relied on them to pay me in a reasonably timely manner so that I could pay my own businesses’ bills. Usually, there were a few stragglers: about 10% of customers on average paid late and some never paid at all and had to be sent to collections. However, in April of 2003, only 25% of my clients had paid for services provided for them from January through March. In other words, 75% were late with their payments. I began to panic.

I had always paid myself last out of whatever was left after paying my staff and the bills – it seemed the fairest way to operate. It also helped me gain the respect of my employees and those in the business world. If there was more money leftover, I stashed it away for a rainy day. When revenue fell short, I made up the difference with savings and never took out business loans, so that I had no business debt.

Despite having done everything correctly, I was now faced with a serious cash flow deficit. I sat down my employees to tell them the bad news. “We’re running out of savings. Old customers aren’t paying their bills. New customers aren’t placing orders. Due to the lack of demand for work, we’re going to have to lay off production workers if money doesn’t start rolling in very soon.”

I did not expect the amazing transformation that occurred within my own staff. Sabrina, the office assistant who was usually quite obstinate, suddenly became quite helpful and got on the phone calling customers to remind them to pay their bills. The sales staff who had whined about the bad economy suddenly began to make sales again, and also were able to personally collect many of the unpaid bills. I had tears in my eyes – I was so impressed with all of their contributions to save the business.

Sabrina later came to me. “I took another job at night so you can cut my hours if you want,” she said.

“Why would you do that? You know your job is safe,” I asked.

“Because,” she said, “I don’t want to see Mitch get laid off.” Mitch was her friend and unfortunately, the first on the chopping block due to his low seniority.

In the end, the business was saved. Everyone got to keep their job. However, Mitch and Sabrina, young and inexperienced in the work world, both left soon after since they were concerned about their job stability. The business began to do well again and flourished and prospered better than ever before as new staff members, some who were seasoned experts laid off by my competitors, filled Mitch’s and Sabrina’s former positions.

Looking back on the experience, I realize that the reason my staff rallied together to save the company was because they viewed it as their own company, not a business which I technically owned. Their pride in their jobs, their sense of ownership, their camaraderie and friendship among each other was their motivation for keeping the company intact. The long hours and hard work I invested was an example to them. My openness showed my sincerity.

I gave them the power to save their own jobs and they came through.

Foreclosures helping landlords Rentals filling with families

I assumed that when the going price for homes dropped in Seattle, I would lose my tenants who’ve been renting my four-bedroom house for a little over a year. The husband has a good, high-paying job; passed our credit check with flying colors; and says he and his wife are interested in buying a home so that they can settle permanently in Seattle near their grandkids.

Instead, my tenant asked for a long term lease. He says he is tired of moving, likes the house he’s in, and wants stability. If he does buy, he wants the prices to drop even further. I’m not complaining – he’s a good tenant.

Similarly, the area where I currently live in Central Florida has also seen a boom in rentals. Because I live in a tourist area, many of my neighbors have subdivided their homes into apartments and rent rooms to seasonal workers during the height of the summer tourist season. When two of my neighbors recently lost tenants this fall, they expected a long wait to fill the vacancies since tourism related employment is down. Such was not the case. Even my neighbor on the corner who lives next to the noisier commercial buildings, put out a sign for a studio apartment last week and had it rented by the next weekend.

The main difference in renters is that where a single person has moved out, a family has moved in. The top floor of the house to my north is a converted apartment that was vacated by a single man who took advantage of lower home prices to buy a condo. It was quickly rented by a family of four: two brothers who work in construction, one of the brother’s girlfriends from Russia, and their new baby. The vacant one-bedroom apartment in the quadraplex to the south was also quickly filled by a girlfriend and boyfriend and their new baby, along with at least two other friends. (Just in case you’re thinking what I think you’re thinking, I should mention that all of the above are white.)

Without being overly intrusive, I’ve wondered if the new renters used to own a house and were foreclosed upon, or found that they could no longer afford to each rent their own spaces. Normally, if you were to rent a place, you’d prefer to be alone. After sharing living quarters with friends all through college and sometimes many years after, there is no better statement to say you’d finally made it on your own than getting your very own apartment, or even better, buying your own condo or house.

In any case, I’m the winner here, along with my neighbors. Our neighborhood, once filled with sometimes questionable transient seasonal workers, is now filled with growing families, buzzing with laughing children, and smelling of grilled hamburgers (It was 80 degrees outside today). My neighbors have a further advantage because they qualify for Florida’s homestead property tax exemption by living in their homes (unlike apartment complexes), while making money by renting out a portion of them.

In the meantime, the newer developments sit empty with “For Sale” signs dotting the landscape. Neighborhoods are blighted with unkempt, overgrown lawns filled with weeds at foreclosed properties. City and Florida state tax coffers are drying up, since the banks won’t pay the property taxes after they kick out the would be owners.

Like Mr. Rogers said: It's a beautiful day in the neighborhood.