The Hard Shift: Leading your team when finances are squeezed
This is for you if you want practical tools for leading your team in the current financial reality. Our resident leadership coach Madeleine Geach from The Good Life has worked through this issue with leaders and founders in her coaching room and she’s here to share the actionable tips to help you too.
Many of us are feeling it right now. The industry is under pressure (again) with hospitality insolvencies – that’s places unable to pay debts and having to close – at their highest rate since the 2008/09 financial crisis. Labour costs and business rates are up, food prices are soaring, spend per head is down. It’s been heartbreaking saying goodbye to some of our most respected and well-loved restaurants. Lyle’s last month hit many of us hard. As one leader put it to me: “If they can’t make it, what hope is there for the rest of us?”
Even in the middle of all this, there are things within our control. This piece shares a few practical ideas that might help with how you lead your team when things are more squeezed than ever. Firstly, please know: you’re not alone. It’s easy to feel like you are, especially when you’re head-down just trying to keep things afloat. But remember most of us are experiencing the effects of the current reality.
Here are 4 challenges the owners and leaders I coach have brought to me recently and how we handled them.
1. How do I communicate the financial reality without spooking my team?
“I want to share some info on the financial pressure we are under so the team understands why we are having to stop some of our usual perks like a big staff party and trips but don’t want to frighten them into leaving.”
- Be transparent, but frame what you say constructively: avoid vague or panicky statements like “we’re struggling.”
- It’s not personal – make it clear that this is an industry wide issue and not something unique to you. “Like most of the industry, we’re adapting to lower spend per head and higher costs.”
- It’s temporary – talk about pauses rather than cuts “we’ve paused some perks – it’s not forever – we’re just having to be a bit more careful right now”.
2. We’ve had to make redundancies; how do we boost morale?
“I’ve been told to layoff 2 long time team members and team morale will be in the shitter after this happens. Any tips for getting things partially back on track? Is there really anything I can do?”
- Acknowledge the emotional impact: don’t pretend nothing happened. “Losing teammates is hard – we are all feeling it.”
- Give people time. When people leave, people grieve. “I know the news yesterday was tough. The one thing we need to do this week is X. Everything else can wait.”
- Once the dust has settled, small wins matter: celebrate team successes (great reviews, good services, customer feedback) to rebuild optimism.
3. How can we encourage a cost-conscious mindset without sounding bleak?
“I need staff to help reduce costs, but constant reminders can feel miserable. How can I do this without being a massive downer?”
- Make your team part of the solution: get their ideas on how to save costs without affecting guest experience.
- Connect it to a bigger purpose: reducing waste also supports sustainability. Frame it as doing our bit for the planet as well as saving pennies.
- Recognise contribution: publicly appreciate waste-reducing, cost-saving ideas, and people implementing them just like you would great service or sales.
4. How can I help my team handle change?
“Some of my team get anxious and stressed out when things change. I’m ok handling it but they seem overwhelmed.”
- Lean on routines: small rituals offer a sense of stability. Keep what you can consistent – like team briefings or meetings, shift rhythms, or how you celebrate wins, so it doesn’t all feel up in the air.
- People resist change they feel is done to them – think about ways you can make your team part of the conversation not just the recipient of decisions. This could include giving input, sharing ideas, feeding back.
- Know you will need to ‘help them over the edge’: resisting change is normal, and it often brings lots of anxiety. Leading through change is like taking your team over a mountain: you will need to be extra present, extra encouraging, and extra communicative to take them with you.
And finally…
We all know this but it’s easy to forget when things get tough. The best leadership isn’t about perks or parties. Just like parenting or being a good friend, it’s not the treats or gifts that matter most. It’s the consistency, trust and knowing someone’s in your corner. What your team really needs is clear communication, positive feedback, and genuine recognition. And all of that costs nothing…
Takeaways:
- Be as transparent as you can be.
- Make it clear the squeeze is temporary and not unique to you.
- Connect cost-saving with something bigger: sustainability, team pride.
- Try to involve your team in changes you make to give them a sense of control.
- The most important parts of leadership are free!