MBA2681 Q&A Wednesday: How Do I Ask an Employee to go from Full-time to Part-time Hours?

0:00Hey, today's Q &A Wednesday's question comes from Terry, and it's a tricky one. He asks, how do I ask an employee to go from full-time to part-time hours? If you're running a small business, this is going to happen more often than you think. Maybe cash flow is tight. Maybe the workload has shifted. Or maybe your business is transitioning into a new phase and you don't need the same resources full-time anymore. So how do you have this conversation in a way that's fair, that's professional, and doesn't completely ruin the relationship with this employee? I'm going to break it down. I'm going to show you exactly what I do in these situations.

0:37These are not hypotheticals. These are exactly the steps I take when I need to shift somebody to less hours than they currently are on. So let's get into it.

0:54Welcome back to the$100 MBA show. I'm your host, Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business. Before we get started, I just want to take a quick second to say thank you for being here. You're a learner. You're a doer. You're my kind of person. And if you want to join people just like you in our growing community of entrepreneurs, hit follow right here in your podcast app. You grow, we grow, we all win. Thanks. The first thing I recommend is to get clear on why you're asking somebody to go from full-time to part-time.

1:32Before you sit down with the employee, way before you even have any kind of conversation with them, you need to get crystal clear with yourself. You need to make sure you know exactly why this is happening, why you're making this decision. Is it about finances? Is it about the workload? Is it about a temporary situation like a seasonal dip and you don't really need those hours right now for the next few months. If you can't explain why in a simple way you're doing this, the conversation with the employee is going to feel really shaky and unconvincing to them. It's not really going to go well in my experience when I did this wrong.

2:09Employees can really sense when you're not confident in your decision. So get clear and get confident. Number two, decide what you can offer. You're going to be reducing their hours, but what's the upside for them? Think about it for a moment, okay? Maybe it's flexible scheduling. They can work from home if they don't need to come to the office anymore, right? Keeping benefits if possible. They can still have their benefits, but reduced hours. Guaranteeing them first pick at the time when the hours are picked up again, right? When you need full-time help, or maybe there's a advancement in a promotion in a position that is full-time hours.

2:48This is all about framing. You have to understand that if you're having this conversation with them, you got to show that you still care about them and that you want what's best for them given your constraints. So you want to start shifting your mindset and framing the discussion as here's what I can offer given the situation. Number three, there is no doubt about this. You have to have this conversation face to the face. If they're not in a close location as you, you definitely should be on a video call. This is not an email conversation. This is a sit down human to human discussion. Why do you have to do this?

3:24Well, because you have to show that you're being honest and empathetic. And that is easily shown when you could see somebody's face. Let me tell you what I say to somebody when I have to reduce their hours, when I'm speaking to them face to face in this conversation. I see something like this, John, I want to talk about your role. Right now, the business simply can't support this role full time. I really value your contribution and would love for you to stay on part time. Here's what that looks like. And then I walk them through transparently what that looks like. The key here is to focus on what you can do and what you want, which is to keep them in the company rather than only focusing on what you're taking away.

4:04You want to present the whole picture to them. And listen, they understand. People understand that you have constraints, you have customers, you need to do what's best for the company. But at the same time, it's your job to be empathetic and to do the best you can do for your team members that you have invested in, that you have worked with and built a relationship with. Number four, give them space to process. Don't expect an immediate answer. A shift or news like this really impacts their income, their lifestyle, maybe even their family in a big way. So you want to really empathize with them.

4:41You want to say something like, I know this is a lot to take in. Please take a day or two to think it over. I want what's best for both of us here. And I want to make sure that you have my full respect and support regardless of what you decide. By giving them space, you're showing them respect. You're also not belittling the situation. You're also, you know, kind of letting them know, I know this is a big deal. I know that this is going to impact you in ways that maybe I don't know about. So I want to give you the time and the space. And you may even want to say, hey, let's meet again in a few days to discuss so that there is some sort of way to come together again and a timeline.

5:19But the point here is you want to make sure that you respect the fact that they have things to handle now that they got this news. Number five, be prepared for no. Not everyone can afford a cut in hours and a cut in pay, especially in this economy and the way inflation is. It's going to affect them. If they say no, you need a backup plan as the leader of your company. That might mean finding someone new part-time to take on these responsibilities or not filling the position at all and restructuring responsibilities and handing off pieces of what's left to other people in the business, other people that are working for you.

5:57In my experience, it's better to prepare yourself mentally for that possibility. It's better than just being caught off guard and kind of not knowing what to do where they just basically say, that's not going to work for me. I'm going to have to leave in two weeks. So you need to be prepared. You need to understand that this is something that you need to kind of have, you know, a couple of contingencies. Am I able to break up these responsibilities and give them to other people in the business? Can I hire somebody part-time, maybe a freelancer off Upwork or whatever it might be. The question here is, is that are you thinking about the other options if they say no?

6:30Now, having said that, in my experience, I have found that a lot of times people say yes, at least temporarily. They're like, I'm not just going to leave and stop getting a salary, right? They say some salaries better than no salaries. So you have to understand they might say yes, no problem. I will go to the reduced hours. But understand that could be temporary. Understand that they might be working on finding another full-time job while they're doing the part-time hours with you, understand that that might kind of go away and you'll be back in the situation where you're going to need to figure out a solution.

7:01So in my experience, a lot of people are okay with going part-time. This is just what I have experienced, but understand that it's only natural for them to look for other full-time work. Number six, document the change. This is a change in your business. If they agree, you got to make it official. You got to update their contract, their hours, their pay, informed payroll, your accountants, all that kind of stuff. Not only is this legally necessary, it protects the trust in your relationship. And no one likes gray areas when it comes to their paycheck or their job. It's better just to be upfront, transparent and clear.

7:34I highly recommend you speak to a lawyer and an accountant to kind of help you navigate this. A couple of phone calls and a couple of conversations can help tremendously in making sure you're doing things right. Let me give you a story from my own experience. When I was running my first team, I had to do the same exact thing, reduce hours. It was scary because it feels like you're letting somebody down. And in a lot of ways, it feels a little bit embarrassing because it feels like maybe the business is not doing as well as I hoped. And therefore I have to reduce these hours. I can't afford to keep them on full time.

8:06But what I found is that when you're upfront with your team member, with your employee, you're respectful, people often appreciate that. They appreciate the honesty and the transparency. And in fact, one team member that I had to reduce their hours later told me that they really appreciated that I didn't just let them go. Like, I didn't even think about that as an option. But at the time, they were like just happy that I didn't fire them. You know, part-time actually worked better for them. They said the stage that they were in, you know, in their life. So you never know. You never know how sometimes what feels like a loss can actually be a win for both sides.

8:42So it's just better for you to be honest with your team and tell them the situation. You don't have to give them all the details, but just tell them right now the business can't really sustain this role in a full-time capacity. It needs to be part-time. So Terry, let me wrap this up in a nice bow for you and everybody else who's listening. The way you ask an employee to go from full-time to part-time work comes down to six things. Let me go through them again. Number one, know why you're doing this. Be crystal clear on your why. Number two, decide what you can offer, what you can do for them, right?

9:16What is the upside of the situation? What can you actually provide? Number three, sit down face-to-face, whether it's on a Zoom call or in person if possible. This is not a conversation to be done on text or email. Number four, give them space to process. This is a significant thing in their life. Give them a chance to process and think it through so they can give you the best answer possible. Number five, be ready for a no. Understand that a no could happen even now or later. They might say yes now, but then be looking for a full-time job. And in about a month or two, they'll be leaving you. So make sure that you understand that you have a backup plan.

9:55You have to have some sort of process of understanding how to divvy up these responsibilities or replacing them with a part-time person that comes in new. Number six, document everything. Make sure everything's on the up and up. I'm not here to sugarcoat this. It's not easy. But if you do it with clarity and empathy, you're going to come out with your reputation intact and maybe even a stronger relationship with that employee because you're opening up and being honest. That is usually the start of a deepening relationship with somebody when you just say, hey, I'm going to put my cards on the table.

10:29This is what the situation is. This is what I can do for you. Let me know what you think. and you give them the respect and space to think about it. Before I go, I want to leave you this. In my experience, the hardest aspect of business is the people, right? Is dealing with people because people are different and sometimes unpredictable. And you have to build that skill of dealing with different types of people day in and day out, different situations, different conversations. The better you are with that or the better type of people you have in your business that are good at that, you're going to be able to be successful in business.

11:04So even if you're not great at that, find somebody who is great at that, that can help you with that. Now, I have a rule in business that I want to share with you when it comes to recruitment. If you are going to have any kind of these conversations with somebody, it should be with a person that actually hired them. If you're going to hire them, you're going to be responsible for dealing with their transition to lower hours or even firing them if you have to. Why? Because you want to make sure that the next time whoever hired them or hired an employee, next time they go and recruit somebody new, they're very clear on what they need and if they need full-time hours or part-time hours or if they need them at all and they choose the right person to do the job, right?

11:46They need to feel that kind of uncomfortable conversation of having this conversation we're talking about so that they're even more vigilant the next time they put a job role out there and they recruit. This is why not everybody becomes an entrepreneur. OK, because you're often going to have difficult conversations and challenges. And most people are trying to avoid that in their day to day life. And as a entrepreneur, you're a problem solver. You're somebody who does regardless of how uncomfortable things are sometimes. Thanks again for the great question, Terry. And remember, if you've got a question you want to ask here on Q &A Wednesday, just go to 100mba.net slash Q and submit your question.

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