Taking an Axe to the Heart

We recently took a look at just how to get those maybe not-so-enthused members of your family in on your family business. Our tips: promise total autonomy, let them run a segment of the business independent from oversight, make sure they work outside the family business first, and separate personal from business as much as possible. As tempting as it is to gripe over who’s going to help Mom set up her DVR this weekend, it’s not as productive as figuring out who’s going to deal with payroll.

But sadly, more and more family businesses find themselves having to do the opposite. Michael Luo examined how painful it is for small, family-owned companies to let go of employees in a recent story in the New York Times. Not that it’s easy for any size company go through layoffs — but it’s a little harder to talk about “reductions in force” when you’ve seen your employees’ kids grow from toddlers to teenagers.

There doesn’t seem to me any good way to do this. Small business owners are going through any number of steps to avoid layoffs, such as cutting hours and pay, giving unpaid leave, or taking no salaries themselves. I wonder, though, about the long-term effects on morale of such measures. Death by a thousand cuts is still pretty painful.

Tell us: What is the least heartwrenching way, emotionally and financially, to handle layoffs?

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