It’s Time To Take Talent Off The Chopping Block

(By John Shomby) A few weeks back, I wrote about the increasing numbers of long-standing radio industry employees being downsized due to cost-cutting and how to move on from that traumatic experience. What if that “experience” could be avoided?

Let’s talk about those who control that situation: the Owners, the CEOs, the EVPs. Are there any other forms of cutting costs in radio where one can avoid these seemingly quarterly reductions in force?

I decided to reach out to someone who has been in several of those positions in his years in business – my very own brother, Lonnie Sciambi. As an owner/CEO, investment banker, consultant, business coach, and mentor for the past 35+ years, he’s worked with more than 300 small business owners from every conceivable angle. These days he goes by “The Entrepreneur’s Yoda.”

I presented this issue to him to get his thoughts from the view of an experienced business executive.

“Here’s what I know and have seen over the years with RIFs, cost cutting, etc. Most of the time the folks who caused the problem, don’t end up paying for the results. Want to change the narrative? Start the cuts as close to the top as possible. And let the workforce know that there are no ‘sacred cows!’ When there’s downturn in the business, created internally, have the biggest cost-cutting begin at the top layers of management.”

“No RIFs up there, but a reduction in salary and bonuses for a defined period at the most senior level of the organization, with the opportunity to earn that money back over future months or quarters. As you move down the organization, everybody feels the cuts, lesser amounts as you move down, with objective of reducing payroll, not headcount.”

“The biggest cost of staffing is hiring and training.  If you cut them, you lose the investment in that hiring and training. So, while the easiest ways to cut costs is reducing headcount, it’s also not the smartest, since you not only lose the investment in those people, but, ultimately, you must replace their function. You pay twice!”

A reasonable, yet tough solution. Let’s take it a step further. Some suggestive steps from strategic, operations, revenue, talent and financial perspectives:

STRATEGIC

• Identify where your deficiencies are and define those places to reduce costs without affecting the product. (Monthly ratings costs, possibly?)
• Prepare contingencies for possible economic downturns and ratings challenges. 

OPERATIONS

• Reevaluate contracts with suppliers and various vendors to secure better, less expensive terms. They will work with you.
• Look at ways to save energy and reduce utility costs. This is where a hybrid work environment could really help.
• Look at the possibility of outsourcing accounting, HR, or IT, if necessary.

REVENUE

• Heavier concentration on revenue opportunities for podcasts, digital advertising (including your app), and live events. Look at yourself as a full-service media company.
• Deliver higher value and get out of the “dollar a holler” game and raise your ad rates. Stop underselling your properties.
• Look at collaboration with TV for promotions/marketing and national radio networks for a news/weather/sports partnership.

TALENT

• Invest in consistent talent training, development, and coaching to increase their value in the market and in the company. The more consistent, the better you can spread out the cost, if there is any.
• Develop an in-house plan so that your staff can acquire new skills to improve flexibility, adaptability and value. 
• Work closely with each talent via one-on-one meetings to measure performance and whatever help is needed as follow-up to keep them on track. 

FINANCIAL

• If needed, offer employees possible options for deferred compensation to assist with present cash flow issues.
• Look at implementing cost-sharing initiatives for benefits like healthcare, stock options, IRA funding, etc.
• Implement an immediate salary decrease for all high and mid-level managers with a set time limit for reevaluation.

So, who would actually do this? I spoke to two current Market Managers with big companies who shall remain nameless. They both concurred that it can be done. It just takes communication, trust, and hard work. What company or cluster is willing to step up and at least give it a go?

Based in Nashville, TN, John Shomby is the owner and CEO of Country’s Radio Coach. He is focused on coaching and mentoring artists, radio programmers, and on-air talent to help them grow and develop inside the radio station and the industry. Reach John at [email protected] and 757-323-1460. Read John’s Radio Ink archives here.