Shrinking Thinking

By Phil Cooke

Anytime the economy is struggling, or during inflationary times, it’s perfectly normal for leaders to look at downsizing their organization—and that includes pastors and ministry leaders. Right now, we’re seeing massive layoffs in the tech sector, at entertainment companies in Hollywood as well as major retailers. So it’s not a surprise that many pastors, ministry and nonprofit leaders who find themselves in a financial struggle naturally think this may be a good time to cut back on their church or ministry staff members.

But before you reflexively let people go to help save money or weather the crisis, here are three important thoughts to consider:

When you downsize, you’re losing talent. Keep in mind current employees know their jobs, and know the organization’s culture—and in churches, they know the congregation and people they serve. Once the crisis is over, you’ll be re-hiring people who don’t know the culture and have little to no idea of the people in the congregation. The ramp-up will take time and be expensive. I can’t tell you the number of times I’ve received frantic calls from pastors and executive pastors who are desperate to rehire after a crisis and are struggling to find good candidates. Especially if you’ve assembled a great team, be very careful before you start taking it apart.

Survivor guilt is real. “Survivor guilt” is what often happens to people who are able to keep their jobs when others are cut. In the best situations, a church or ministry staff becomes a very tight-knit family, so dismissing some members of that family can hurt the remaining team’s motivation and devastate morale. It can also damage personal relationships between long-time friends and associates and can radically change an organization’s culture.

Re-staffing is expensive and time-consuming. Eventually, the crisis will end and you’ll start growing again. But new employees have to be vetted, selected and then trained. Recruiting good people takes time, and training takes even longer. I can almost guarantee you that recruiting a new team will take longer than planned, and during that period, you’ll be operating at less than your best.

Obviously, if you have under-performing employees who are hurting the organization then a crisis might be a good time to make those changes. I’m a big believer that leaders need to be vigilant about helping failing employees move on to another place that’s a better fit. But with a good team that may be difficult to replace, I suggest you explore every possible alternative to keep from decimating the staff.

Recently, the Wall Street Journal reported that “If you look at the science over the last few decades on downsizing, you look at thousands of firms that downsized, you compare them to peer firms that chose different ways of managing costs, like for example taking pay cuts, and the researchers conclude that downsizing is, quote, ‘dumb and dumber.’ It predicts consistent and significant decreases in profits, and return on assets.”

I’ve seen churches and ministry organizations that cut too quickly and too close to the bone, and it took years and sometimes decades to correct the mistake—long after the crisis was over. Plus, turnover often undermines the confidence of the congregation. When good people are let go, church members can become skeptical about leadership.

Don’t make that mistake. Use a crisis to rethink priorities, strategy, and planning, but don’t be too quick to cut the people who have made you successful in the first place.