Your Generosity & Empathy Will Destroy Trust Unless You Do This
Before you make benefits promises to your team, understand the implications and whether you have the funding and resources to back up your commitments.
Two years into her first CEO post at a small, growing start-up, Belinda was faced with what felt like an impossible decision.
Revenue had not grown at the pace she had forecast in the financial models she and her Board had agreed upon. While positive outcomes could be just around the corner, she didn’t feel comfortable waiting to cut costs.
Layoffs are never fun, but Belinda had additional complexities to consider. One of her leaders was just diagnosed with breast cancer, and another was 6 months pregnant.
Belinda had provided generous and flexible short-term and long-term leave policies. It was one of the hallmarks of her leadership approach.
It felt both untenable to let these leaders go while they navigated such critical life moments, but they were also among the leaders with roles that were the least essential and easiest to absorb into other functions. In addition, they were among the highest paid leaders.
In any other scenario, these two leaders would be among the first on the chopping block. They would have been painful to part with because both were strong performers and a pleasure to work with, but any fiscally and operationally responsible leader would view them as obvious cuts.
This situation was different. With their health situations in mind, Belinda felt trapped by her desire to be kind and her commitment to being a responsible leader. If she retained them, she would have to ask other employees to step in during their respective leaves and she would have to let go of more employees to replace the cost savings that would have come from eliminating the roles of these two leaders.
As a CEO committed to creating a warm and caring workplace, Belinda felt caught between a rock and a hard place. All of the options she was considering felt like they would be in opposition to what she had promised employees.
If she let go of the leaders going through health situations, she would be signaling that her workplace wasn’t safe for mothers or anyone with unanticipated health needs. If she retained them, she would be signaling that didn’t value the needs of other team members as much as she valued the needs of the two employees.
None of it felt fair or in alignment with the type of organization she wanted to create.
Belinda’s scenario might have felt unusual, but throughout the last 5 years, punctuated by the pandemic, striking the right balance between being kind and fiscally responsible has been a common issue for many leaders. Today, with new uncertainties in the global economy, this continues to be a challenge.
How do you offer the most compelling and generous benefits while navigating uncertain financial conditions?
Empathetic, heart-led leaders need to anchor their policies to what matters most — trust.
I know too many leaders who dream of supporting employees with incredible benefits, but don’t have the resources to do so (I was one of them).
What these leaders forget as they craft their policies is that broken promises are far worse than no promises at all.
When you tell employees that they will get months of paid parental leave, you need to know how the work that they leave behind will be covered.
When you offer employees the ability to work part-time as they navigate health issues — their own or that of a loved one — you need to understand the impact on your operations and goals.
When you allow someone to work a different, more flexible schedule, you need to account for what will happen to group collaboration and communication as a result.
These challenges are particularly acute in small, dynamic organizations where much of the work evolves every day, and it’s difficult to anticipate what is ahead. But even large organizations can struggle because the pace of change continues to accelerate, while the demand for increased productivity and rapid results has also increased.
So is the solution to simply not offer more generous benefits and return to more miserly and antiquated models of supporting employees?
That is one option. But I recommend considering another.
View your benefits offering as a strategic investment worthy of deep planning.
When you make strategic investments, you likely spend significant time assessing and planning them carefully. You run scenarios, calculate the return on investment (ROI), and consider unknowns. You might even plan out alternative approaches to give you different options that will achieve similar results.
Why not do the same for your benefits?
Benefits are designed to help you do more than attract and retain employees. They also exist to enable employees to focus on their work instead of having to worry about their health and other needs. Taken together, benefits contribute to some of the most foundational elements of your organization’s success — your talent quality and their level of productivity. These are worth investing in because they are so essential.
Look beyond financial investment to more thoroughly assess the impact of each benefit.
When you set your benefits, it’s easy to consider only the financial costs of the programs you offer. But financial costs are only one aspect of the investment.
There are many operational implications, particularly with vacation and leave programs. For example, if two people from a department of four take parental leave during the same period, how will the remaining team cover their responsibilities? Will goals be impacted? Are there resources to help them provide coverage?
If you don’t understand how benefits impact your team operationally, it’s important to take the time to do some discovery. Without an operational understanding, your benefits policy decisions may unintentionally create challenges that have far-ranging, negative implications.
You can avoid these consequences by taking a moment to map out scenarios and corresponding actions. Clarifying these implications can help you set the right benefits policies up front, which reduces the likelihood of having to walk back commitments and undermine trust.
7-Steps to Benefits You Can Stand Behind
1. Take stock of your benefits philosophy.
Clarify what you want to offer and why you want to provide that level of benefits. This can be related to market data of comparable organizations, or connect to your mission and values. It will help you anchor your why.
2. Identify benefits that may result in an operational impact.
Examples include:
Flexible work hours
Paid time off
Paid leave
Emergencies
Professional development stipends
3. Brainstorm 1-3 scenarios for each benefit area that could represent a challenge.
Examples include:
More than one employee using the benefit at once in the same department
An employee requesting use of more than one benefit in a 12-month period
Employee(s) connected to a major critical event or annual action using a benefit
A new employee requesting use of a benefit
4. Outline the implications for different departments and employees in each of these scenarios.
Examples include:
Delays to key workstreams
Needing people from other departments to jump in to provide coverage
Hiring freelance or fractional support to bridge the gap
Deprioritizing particular initiatives and doubling down on others
5. For each implication, list options and corresponding actions, and costs to help mitigate the situation.
Examples include:
Budget to hire interim talent
Staffing to help with interim hiring and onboarding
Pre-developing contingency plans for the highest priority goals
Working with leaders to help them anticipate unknowns and how to pivot as needed
The most valuable insight you can gather from this exercise is a realistic understanding of how much it costs financially and operationally for you to provide the level of support you want while minimally disrupting your business.
6. Align your benefits with your financial operating model and with your stakeholders.
Once you have an understanding of what it will take to realize the benefits that you want to offer your team, you need to connect the dots and make sure your financial operating model reflects those costs. This is where too many empathetic leaders go wrong.
It’s not enough to want to support your people generously. You have to make sure you have the financial resources to back up your vision.
As you integrate the fully loaded costs from your benefits scenario planning into your financial model, you should be prepared to make some hard choices.
To ensure that you are creating a financially healthy organization, you might need to reduce spending in other areas, commit to increasing revenue, and/or get more funding to support the model. It’s even possible, after you do your full analysis, that you decide you have to dial back your benefits. That might feel counterintuitive, but if your business model doesn’t support the incremental costs, then this may be the most fiscally responsible thing to do.
There is only one thing worse than not offering the most supportive benefits possible — it’s offering incredible benefits and then having to take them away because you cannot financially back up your commitment. It’s a hard decision to swallow, but knowing in advance what’s possible and what isn’t is far more valuable than living in “wishful thinking land” and unintentionally misleading your staff.
7. Once you are clear on what you’ll offer and why, revisit your benefits philosophy.
Through this process, you’ll have learned a lot about how you prioritize and where you invest your resources. It might be true that where you started is where you end up, but it’s also possible that after looking at all of the implications and costs, you want to revise your original benefits philosophy. Take this moment to verify or adjust your benefits philosophy so that it can continue to serve as your why going forward.
Take a collaborative approach that accounts for future changes.
As you go through this process, remember two key concepts: (a) you don’t have to do this alone, and (b) your financial model is not a static structure—what’s true today may not be true in the future.
Seeking help: You can collaborate with your Board and other stakeholders to help you determine how to make trade-offs on spend and on how you are funding the organization. By including them in your process, you’ll be generating early buy-in and leveraging their experience and brain power.
Creating a flexible model: You can set criteria and milestones that will be triggers for you to re-evaluate what you can support in the future. These can be based on growth, profitability, or other measures that indicate the organization has more (or less) capacity to support benefits investments.
Update your team when you have clarity on your offering, the why behind your design, and your future vision.
Once you have a more clear assessment of your benefits offering, the impact on your financials, and what you are able to support, now it’s time to craft your communications to your team.
Regardless of whether you are adding new benefits, revising previous ones, or staying the course, sharing what you have discovered, why you landed on the current set of offerings, and what you anticipate may change in the future will help you build trust with your team.
Don’t approach the conversation with trepidation or with apologies. Instead, feel confident that you have done the work to identify what matters, why it matters, and how you will make adjustments in the future as conditions change.
You don’t need to make your team promises about what will happen and when. You simply need to share your approach. This level of transparency will be appreciated by many of your staff, and for those looking for more certainty or greater benefits, it might be a signal that your organization isn’t a great fit, which is also a win.
Stay focused on the right goals so that you complete your process effectively.
Your goal shouldn’t be to retain everyone in the organization. Your goal is to create a benefits policy that reflects your values and philosophy and that you can financially support. By having done the deeper work above, you’ll have created policies that you can confidently communicate because you are equipped to fully support them.
When you communicate your updated design, you are seeking to create an appropriate level of transparency so that your employees can make an educated decision about whether the company’s benefits meet their needs.
In Belinda’s case, she worked with her Board Chair and her CFO to align on what was the best plan. She decided to ask the Board to help her seek out more funding, including a bridge loan, to help her retain the two employees experiencing major health moments and fund additional temporary coverage support.
The funding would also enable her to provide the coverage needed going forward if other employees need to take advantage of the generous benefits policy. Through the assessment and planning work, Belinda was able to identify milestones and KPIs that helped her, her leadership team, and the Board be confident that the updated benefits plan was financially sustainable and would only increase when the organization had additional financial capacity.
It was not an easy process, and there were some moments of great stress as she worked through the details during a financially precarious moment. Overall, Belinda was grateful that she and her team invested the time to thoughtfully develop a strong benefits offering going forward. Through this process, she, her team, and her Board had a deeper understanding and trust in their model, which ultimately resulted in even more staff trust and productivity.
Key Takeways
If you are a leader who values being able to be generous and highly supportive of your team, move beyond platitudes and superficial policies. The only way to build trust is to do your homework before you offer benefits.
Take stock of your benefits philosophy.
Identify benefits that may result in an operational impact to assess the true cost to deliver on your offering.
Brainstorm 1-3 scenarios for each benefit area that could represent a challenge.
Outline the implications for different departments and employees in each of these scenarios.
For each implication, list options and corresponding actions and costs to help mitigate the situation.
Align your benefits with your financial operating model and with your stakeholders.
Once you are clear on what you’ll offer and why, revisit your benefits philosophy.
As you go through the process, remember, you don’t have to do this work alone and what you create today can be modified in the future when the conditions of your business change.
Last but not least, take the time to communicate your updated philosophy and benefits offering to your team so that they can feel informed about your approach and determine if they feel aligned.
Follow this process, and you’ll not only offer benefits that align with your principles, but you’ll feel more confident that what you’re doing is the best path forward.
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