In the early days of the pandemic, WorkForce Software furloughed 22% of its staff and reduced salaries. A few months later, 97% are back. Here's why.
When the pandemic struck, WorkForce Software didn't panic, but it did go into full bunker mode, furloughing 22% of its staff and reducing salaries across the board by as much as 20%. Bonuses for executives and managers were pushed back for several months.
Employees companywide – from customer service representatives to engineers – were asked to stay home without pay or reduce their salaries as the software provider figured out what impact the coronavirus would have on its business.
A few months later, 97% of those employees are back, and WorkForce Software is positioned to weather any more COVID-19 pandemic hits that may come. CEO Mike Morini credits the company's impressive employee retention rate to its focus on transparency and accountability.
"Our employees knew our mission was to bring everyone back," Morini told business.com. "We got very transparent with the employee population early on."
It didn't hurt that WorkForce Software has long focused on accountability, whether employees answer phones or develop software. When the time came to step up and sacrifice, the employees were more than willing to do so.
"It's a testament to our focus on transparency," Morini said. "With transparency comes accountability. We expected everyone to act as the CEO of their role, and that's what happened."
Retaining talent was extremely important to WorkForce Software in the early days of the pandemic – and it continues to be. The software company operates out of Livonia, Michigan – which is not exactly a hotbed of technology business, but it still has to compete against Silicon Valley tech companies. Most college graduates expect to get paid more than this small business can afford. As a result, when WorkForce Software identifies key talent, it goes to great lengths to keep them. This has been especially true during the pandemic.
Throughout the furlough period, WorkForce Software kept everyone apprised of the situation, inviting furloughed workers to join semimonthly meetings. Morini said he took pains to get the message across that the company didn't want the workforce reductions to be permanent, and he encouraged staff to use the time to focus on their family and reset.
"We spent the last five years building this amazing team – we didn't want to lose them," Morini said. "We laid out what we were trying to do and how we're going to hit our goals to bring everybody back." He said those who were willing to sacrifice knew the company would pay them back once business recovered.
Employees who accepted lower salaries and delayed bonuses for several months were offered flexibility in addition to transparency, which Morini said prevented them from jumping ship. Executives encouraged workers to put their family first. If that meant taking an hour during the workday, then so be it.
"We treated employees like adults and showed them we trusted them," Morini said.
Bringing workers back
WorkForce Software didn't delay once it was clear the business would be OK. When the pandemic hit, uncertainty ruled. Nobody knew the severity of the virus or what would be effective in slowing the spread. That uncertainty led WorkForce Software to take action toward more conservative financial practices at the onset. But its biggest fears weren't realized. Other businesses were still making investments in cloud-based software to help manage their workforces more efficiently.
Instead of doing more with less, as soon as the software company saw business was fine, it started bringing employees back. WorkForce Software is also making good on repaying employees. Everyone's salary has been fully reinstated, and reductions (apart from furloughed workers) are being paid back in 2021.
Putting employees first
WorkForce Software illustrates a common theme among business owners during the COVID-19 pandemic: They are putting their employees first, whether that means limiting layoffs, providing health insurance or increasing flex time. In a recent business.com survey of small business owners, 51.8% said they are offering flexible hours, while 18.8% said they plan to expand their healthcare plans.
"One of the things that has come out of this is that more people realize small business owners care for their employees," said Tom Sullivan, vice president of small business policy at the U.S. Chamber of Commerce.
The COVID-19 pandemic's impact has been a tale of haves and have-nots for small business owners. In one camp are the retailers, restaurant owners, entertainment businesses, and the suppliers of those industries that have seen sales be decimated amid the pandemic. On the other side are the companies that cater to enterprises in banking, technology, financial services, and other industries that haven't seen sales fall off the cliff. This group has been able to grow, even as thousands of small businesses close their doors forever. As of the end of August, 163,735 U.S. businesses on Yelp had shut down, with 60% closing permanently.
WorkForce Software is among the fortunate ones, which should insulate it if the economy takes another hit from skyrocketing coronavirus cases. It now has experience on its side, for starters. It also has a staff that is all the more loyal, thanks to WorkForce Software's action when the pandemic first hit.
"We've got 40 recs that we want to fill in the next 90 days," Morini said. "If we see another shutdown or see business slow, we won't reduce internally. We'll turn off the spigot on new things and manage business. We need to be smart on that."
Ultimately, Morini said, the company's focus on employees and complete honesty about the situation helped it get through the first coronavirus storm with little turnover and should help it survive another one if it does manifest.
Morini said small businesses, regardless of their size, need to preserve their most important capital, which is their employees. To do that requires honesty, engagement and accountability.
"You have to position the business to best survive the storm," he said. "Sometimes it's hard to make reductions. But you have to be honest. If there's another shutdown, you got to get ahead of that, not behind it."