Hear practical business lessons learned from the Disney+ launch that you can apply to your small business.

Episode 29: Disney Layoffs: Tips for Hiring & Firing in Your Small Business (Transcript)

Nov 3, 2020



Intro (00:01):
Pixie Dust and Profits is a podcast for small business owners who love Disney and want to sprinkle some of that magic onto their own businesses. Join your host, Nicole Boucher, and Yasmine Spencer as they explore the mouse’s $12.6 billion operation and break down exactly how you can apply these big scale concepts to your own.

Yasmine (00:25):
Hello, and welcome back to another episode of pixie, dust and profits. Now every week, Nicole and I come to you with ways that Disney operates that you can learn from in order to grow your business with some recent, like big news coming from Disney, we wanted to sort of shift the tone of this episode to talk about how to deal with having to let people go in your business, which is a bummer topic to talk about, but it’s something that a lot of entrepreneurs face in their business, and we want to support you in doing it in the best way possible. So big news, I’m talking about, I’m sure you’ve heard this Disney had to lay off 28,000 employees as coronavirus has really changed their theme park business. So we know that Disney world in Florida has been open since the summer. They have been operating about 30% to 50% capacity, I believe.

Yasmine (01:23):
And it’s been getting busier and busier as the protocols that they have put in place. At least when people who go to the parks feel safe. Despite, you know, the threat of coronavirus Disney has made sure that people are wearing masks all the time, but they’re checking park attendees to see if they have any symptoms before they actually enter the park. And the only place that you’re really allowed to take your mask off is when you are seated at a table. So Connor, the days where you can get a Mickey pretzel and wait in line for splash mountain and you know, snack while you’re waiting for your turn on the ride. No, the only time that you can eat is actually when you’re seated at a restaurant because you can’t take your mass off. Otherwise Disney has also implemented a lot of social distancing.

Yasmine (02:05):
So those lines, they look way, way longer than they actually are because people are actually six feet apart while they’re standing. So with all this, obviously, if you have fewer people attending well, you have fewer people working to manage them. I think Disney world had about 70,000 employees and Disney land has 30,000 employees altogether. Well, speaking of Disneyland, they haven’t been able to open to date. There’s been a lot of controversy around the closure that governor Newsome is continuing to enforce of all theme parks. And in fact, they recently released new theme park guidelines for when a park at Disney scale can open. It doesn’t seem like it’s going to be any time soon. I think the, the metric that they put in place as there can only be one case of coronavirus, every hundred thousand people in orange County, our Anaheim, where Disney is located before there’ll be able to open.

Yasmine (03:06):
And of course like if that number goes up again, they have to shut down. Disney’s obviously super upset because the longer that that park stays close, the longer that, you know, people are going to be out of work and the less that they can actually continue to like hold onto furloughed workers. So of these 20,000 workers at Disney had laid off about 67% of them were part-time employees. And the thing is, is they didn’t just let go of the theme park employees. A lot of the corporate employees at Disney’s various offices were also let go as part of this. And this just goes to show that when, you know, a few of your biggest revenue streams are effectively like dead, as much as you want to pivot as much as you want to leverage your other streams of revenue to boost numbers when you’re down, you’re down.

Yasmine (03:53):
And unfortunately, sometimes you have to make difficult decisions. So what we’re going to talk about is how to evaluate when it’s time to make those difficult decisions. And we’ll also talk a little bit about the best way to go about making them to really not burn any bridges, because we don’t want to be mean, you know, a lot of businesses are falling on hard times. Many of us are really wondering, like, are we going to be able to keep our doors open? And you know, if you are in that situation, sometimes you just have to let go of your team members.

Nicole (04:26):
So first, before we even get into letting go of team members, we want to get into some best practices when hiring team members that can put you in a position where you might not need to let them go, or when you do, it’s, it’s more about the role itself and less about the performance of the person. It’s because the revenue isn’t coming in and you can’t keep them on the books anymore. It doesn’t really have to do with how they’re performing. So first and foremost, if you looking to hire someone for your business, do not rush through it. I know it can be really tempting to feel like I need someone in place right now, so I can get the support that I need to run my business, because I’m just too busy. What’s going to happen. If you do that, where you rush into hiring someone is you’re probably not going to have a proper vetting process.

Nicole (05:16):
You’re not going to make sure that they have the technology training, the systems, training, the cultural fit to work with you and your business. And you’re also probably not going to have procedures in place. So that way, when they start, they know exactly what they’re working on in that first week, that second week, if you’ve ever worked a corporate job or as a cast member at Disney, the first few weeks on the job, you are shadowing somebody else. You are not allowed to have any autonomy at all. Disney world. You have to go through an entire program to learn all of their safety protocols. You have to re imagine how you speak to you even have to learn how to point differently. So, you know, when you’re bringing someone onto your team, you might be a small business owner and you might be hiring experienced contractors, but that doesn’t mean they have experience with your brand.

Nicole (06:10):
And so anything that you can do upfront to make sure that you’ve hired someone who can come in and get right into the things that you have for them, first of all, make a job description. It sounds so boring. I know, but you know, write down all of the tasks that you want this person to do. Look like to walk away, look at it a few days later. See if it makes sense for one person to actually be able to do all of those tasks on their plate. And you’re not trying to ask a copywriter to also be your project manager to also somehow make the, your products in Shopify, right? So write everything down, make a job description, take applications, call their references. Don’t just take someone at face value. Someone who could be a great employee for somebody else doesn’t mean they’re a great employee for you.

Nicole (07:00):
So make sure there’s a fit there. So that’s like my number one tip when going into hiring, do it a little bit before you’re ready, have a couple of procedures in place. If you’ve got a job description, you already have the role you want them to have right there outlined. So when they start, you can say, okay, on the job description, I said, I wanted you to do this. Here’s like the micro steps to get there. And that’s what you’re going to work on in your first month. So you can kind of make that path for them and they won’t have any surprises when they start on the team.

Yasmine (07:33):
You also won’t be in a position where they’re twiddling their thumbs, because you don’t know what to give them because you were just so overwhelmed and you had to bring someone on board yesterday and now you just don’t know what you can delegate to them accordingly. You don’t want to be in that position. The other thing that I’ll add as part of like the process for making sure that you’re hiring the right person is we always love to give someone a little bit of a test before they come on board. Now I want to clarify when we say tests, like if you’re hiring a graphic designer, we don’t want them to design a logo for you or anything of that nature, but rather we would have them do a small project max, 15 to 20 minutes. And this is only for the last few candidates that we’re trying to decide between.

Yasmine (08:12):
Not everyone coming on board where they will do a task. They will routinely face as part of their role on your team. So maybe it’s like answering. If you want to see how they answer specific emails, because they’ll be managing your inbox, you give them two emails to respond to. If you want to see how they prioritize information as a project manager and put that into a sauna, you give them a small brief, and then look at the project plan that they sort of created. It’s going to be tiny project, because again, we want to respect their time, but make sure you’re incorporating a little bit of a test that will give you, I think a lot of information on how they work and it’ll help you decide if they work in a way that is conducive to your working style. And you can even

Nicole (08:56):
Give them a test for maybe you don’t give them all the information just to see if they come back to you and say, I can’t do this because you didn’t tell me X, Y, Z, or if they go to Google and find the answer for themselves, which is, you know, there are times where asking for help is great. And as the operations leaders for our clients, there are other times where some of our favorite hires on teams that we work with are the ones that try a little bit harder to find the answer themselves. So that’s another kind of tests that I like to do. We’re not trying to trick them here. And we’re just trying to maybe leave out a tiny little detail to see how they interpret it and how they you know, make decisions on their own.

Yasmine (09:37):
Yeah. All right. So we talked about what to do before you hire. Now let’s fast forward, you know, we’re dealing with a pandemic, you might have to let someone go and, you know, Nicole and I have unfortunately been in a situation on the teams that we worked on, where we’ve had to do the letting go for our clients. And it’s never an easy conversation or discussion to have, but here’s some of the factors that we look at when we decide if it is time to let someone go, because often when this happens, it’s not a performance-based issue. It has to do with perhaps the team is restructuring and changing and the role is no longer relevant. So times like that, what we look at is this person in the role that they are in, is it something that makes the company money? So when we make revenue based on the inputs that they put into the work, or is it something that saves either the CEO or one of us time?

Yasmine (10:31):
So we can do projects that make the company more money. So to break this down for your business, when evaluating, whether you need to let someone on your team go, are they doing work? That’s making you revenue, or are they doing work that saves you time? So you can make revenue? Well, if the projects that they’re working on, can’t help you make more money or don’t make you money directly. Then maybe they, at this point, you’re not bringing in the revenue to justify their role on your team. And that can be like a really hard decision to make. So for example, I think a role where this might come under fire using the strategies like a graphic designer, right? Well, what is the dollar value that graphics bring, like having a beautifully designed image or, you know, sales page? Can you say if that directly drives more revenue? Well, if you’ve been tracking things you can, but you know, one other way that you can look about it at it is if you let go of your graphic designer or reduce their retainer, how much time are you going to have to spend creating those graphics and will be additional time that you spend actually save you money? That can be one way to evaluate it.

Nicole (11:37):
I figured the type of person who will sit there and stare at, okay, is this centered? Are there two spaces here and get really carried away in that, that it can be a lot of lost time that you have been doing something way better. So definitely don’t underestimate how much time you spend on things. Yep.

Yasmine (11:54):
So another thing that you really want to look at is if you’re changing things up within your company, or if you’re scaling back, is there a way that you could potentially reduce their retainer versus letting them go altogether? And, you know, with a reduced retainers, that’s something that they’re okay with because you know, they might not be, you can go to someone and let them know that, Hey, like I know we have a retainer of like 20 hours a month, but you know, I want to cut you to 10. If they’ve been working with you for a while, they might be willing to continue to work with you just because they know your business and they have that relationship. But you also have to respect the fact that for some contractors, it might not be as feasible for them to have a bunch of clients at smaller retainers, as it is to have like a few clients at a much bigger retainers.

Yasmine (12:40):
So what I’m trying to say here is definitely talk to them about potentially reducing things, at least in the short-term until things bounce back. I mean, that’s one thing that Disney did, right? Like they had to let, they had to furlough a lot of team members because there just wasn’t any work for them. And they did pay them for a while because they were able to, but, you know, in may those coffers dried up, but they still continued to pay for the health insurance, a furloughed employees for a long while after that, until they had to make a decision to unfortunately let them go. So when you’re looking at these hard times, can you reduce the amount of work with them to continue to have them on your team? Because we all know sometimes it’s a lot harder to let someone go and then have to like onboard them back again in the future.

Nicole (13:26):
Speaking of that, I think it’s a good, important reminder to not get too caught up in how they might react or how you might be hurting them. Honestly, there’s been so many situations where we have had to let someone from a team go, and this is even before the pandemic, our jobs just means sometimes we’re, re-evaluating the strategy of a business. So it does often come with having to change roles. And one of the things to remember is that you don’t know what’s going on in their lives or their businesses. And for example, I had to let somebody go recently and, you know, she had a lot going on in her life and she was actually thankful for it because she was feeling so guilty, right. And then there’s someone else who I had to reduce her hours. And she was in the same boat that I was in, where we were suddenly homeschooling.

Nicole (14:15):
And she needed that time to be with her kid. But she knew that once some job got signed on, there was an opportunity for extra hours. And so don’t always assume that it’s going to be a bad outcome. Sometimes it’s a really good one for both parties. And then you can come back later when the company has reopened again and re hire. I have done that before. I let someone go about two years ago and I loved working with her. I just had to pivot my business in some way and didn’t have a need for her anymore. But you know what? We parted on such great ways that I came to her about eight months later and said, Hey, I’m starting a podcast and I need help. Can you come join my team? And so these things happen where things just ebb and flow.

Nicole (15:02):
And in the small business world, we all know that it transitions very quickly. So you have places like Disney doing things like lightening up on their Halloween decorations. So that way they don’t have to employ the staff who keep the decorations meticulous and the warehouse all the way down to the ones who hang them overnight. They’re probably not paying for anyone to work that night time, over time pay because that’s money that they don’t have right now. And so they had to decide to cut corners in different ways. And they’ll bring those employees back. There’s going to be a huge Christmas party at Disney again, sometime, but the way you treat people in the off-boarding process makes a big difference. Even if it’s someone that you think you might not work with, again, these circles are so small and you don’t want to burn any bridges for something that really could have been happened for so many reasons, the industry, the pandemic mismanagement, not, not leading the team.

Nicole (15:58):
I mean, some of the reasons that you need to re reorganize is, might be because of you. And so I just don’t want you to think that this is a personal thing. There can be positive breakups, and we’ve definitely seen it happen. Some of our favorite contractors, we ended up hiring ourselves after letting them go from another team. It didn’t make sense for that client to have this person, but we really loved their work and we wanted to continue working with them and we continue to refer them. So definitely think in terms of, is this the best move for my business? And is this something that I need right now? Or am I holding onto it because I might need it in the future.

Yasmine (16:39):
And just to add to what Nicole said, and I think you covered it a little bit, but you know, when you are parting ways, ask them how you can continue to help them in their business. Maybe it is giving them referrals, right. Or maybe it is writing them a testimonial or something. If you are letting someone go and you want to keep that relationship positive, they’ve done a good job for you. Give them like a hand, help them out, connect them with any friends that, you know, that might be looking for someone who has their specific expertise.

Nicole (17:09):
And then our last point is really just a more of the legal side of things. Be prepared to have to give notice. Generally, you probably can’t cancel their contract right away. So you don’t want to do anything that might set them off. If they have access to the keys, to the kingdom and have access to sensitive financial information or anything like that, you want to remove that access ahead of time, any important passwords just be prepared, be prepared to just be prepared, to have to give two to four weeks notice depending on what your contract is always go back and check that contract. If you don’t have a contract, make sure you have one, then next time, hire someone and just look out for yourself in that way. If they have access to sensitive things, remove it before you give them the notice. You just don’t want to run into any situations where things could go sideways quickly. It is your business and you need to protect it. And even if it’s someone who has been a wonderful employee for you for many, many years, it is still a sensitive thing that, you know, you have to protect the risk of your business. You are the leader of it.

Yasmine (18:16):
So I know that it was a little bit more of a bummer topic than we typically talk about, but yeah, it’s part of business and we thought it was super timely and something that we should talk about because a lot of our clients came to us at the beginning of the pandemic asking us like, Oh, should we consider reducing retainers proactively? Or you know, should we evaluate, everyone’s like role on the team. And thankfully for their businesses, it wasn’t impacted too significantly. So everything was pretty much status quo, but we wanted to make sure that if you are dealing with these issues, like right now in your business, that, you know, we gave you a little bit of guidance on how to deal with it. What’s the lessons learned from our positive Disney. Okay.

Nicole (18:59):
We’ll see you next week and join us on Instagram until then. And we’ll be having an upcoming episode during the week of black Friday, where we’re going to be answering your questions. So if you’re interested in that, send us a DM on Instagram @pixiedustandprofits and we’ll send you the link to apply, to be featured on that.

Yasmine (19:17):
Thanks so much. And we’ll see you real soon.



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