Layoffs take a toll on workplace culture, another 2.1 million Americans file for unemployment

Another 2.123 million Americans filed for unemployment benefits in the week ending with May 23rd. Bert Bean, Insight Global CEO, joins Yahoo Finance's Alexis Christoforous and Brian Sozzi to discuss why he thinks it is more important, now than ever, to keep and invest in your employees.

Video transcript

ALEXIS CHRISTOFOROUS: Well, as today's jobless claims numbers show, companies continue to shed jobs. But our next gust believes this is actually a crucial time for companies to be investing in their employees and keeping them onboard.

Joining us now is Bert Bean. He is CEO of Insight Global. Bert, good to have you here. So why do you think it's important for businesses to hold onto their employees, perhaps now more than ever?

BERT BEAN: Well, that's a great question. And thank you for having me today. I think, you know, trust in a company is so important. Trust among your people is so important. I think trust is really the underpinnings of having a great culture in your business.

And if you think about it, what makes any business great, whether you're building a product or providing a service, is your ability to get your people really bought-in to what you're doing as a company, is to get them engaged is the word that a lot of people use. And we get our people engaged by building trust and creating a culture that uses a causation for success. And nothing eviscerates trust more and eviscerates culture more than doing layoffs.

And so I know-- I know it's hard out there. And I know it's painful. And I know that a lot of CEOs are catching heat from their shareholders. But boy, if you can tell a different story to your shareholders and say, hey, let me hang on to my people, let me hang on to trust, let me keep developing my people right now, then you're going to come out of this thing a lot faster, I believe. And that's certainly the-- the tact that we're taking at Insight Global.

BRIAN SOZZI: Bert, we're getting some pretty big names flat-out no longer furloughing people, laying them off-- American Airlines, Boeing, United Airlines, just to name a few. Do you think they are ruining their businesses in how they come out of this over the next 10 years? Because to your point, I mean, culture is key.

BERT BEAN: Yeah, I mean, ruining is a-- is a strong-- strong word. I don't know if they're ruining it, but they're certainly doing damage. And it's funny, I think culture is this sort of hard thing for people to kind of wrap their-- wrap their mind around, and maybe specifically shareholders. And it's hard to understand the real power.

But, again, the culture-- if engagement is key, and if culture drives engagement, then you've got to hang on to your folks. And you know, that-- that's what we're doing. We're-- we're not doing layoffs at Insight Global. We actually have hired 600 people this year. We've got 170 that have started, another 440 that are going to starting in the summer.

We've done over 240 promotions into different sales roles within our organization. We're-- we're really doubling down on this. And we don't believe that we're going to be in this time for-- forever, so it's our goal to really make sure that we're coiled and we're-- we're there to help provide for our contractors, and our customers, and our people through this time so that we can come out of it so much faster.

BRIAN SOZZI: Bert, how-- how hurtful-- we've all seen-- also seen companies, if they haven't been laying workers off, they've cut their pay pretty drastically. How impactful do you think that is to corporate culture? And how-- how important is it that they restore those pay increases very soon?

BERT BEAN: That's a great question. But look, I think people are more resilient than people sometimes give them credit. I think what really people are expecting is just transparency. People want to know what the game plan is.

And that's something that we've tried to be very upfront with our people about is what is the game plan? How are we going to play offense during this recession? What do we need to sort of all do here, right? How are the numbers? What is EBITDA growth like? What is revenue growth like?

And so I think people will be understanding if we come to them and say, hey, look, we have to take a pay cut here, but we're all going to share in this burden. And if we can get back to these sort of metrics or these targets, that's when we sort of will put these pay increases back. We haven't had to do any sort of pay decreases.

But I do think that people are resilient, and people will get it, and they'll understand if you are just straight-up with them and truly transparent. And this is a time right now that I think every-- every company likes to brag about how transparent they are. Every company likes to have values and mission statements. And this is the time that those are put to the test.

And it's the time that we really need real leaders to emerge and to say, yes, our values mean something. Yes, our purpose means something. And we're going to share with our whole company, you know, what we're all about and what our plan is here. And if you can do that, and get that sort of buy-in, your people will understand.

ALEXIS CHRISTOFOROUS: You know, you're-- you're a staffing and management company. I'm curious what clients are telling you right now. What are some of their biggest challenges? What are some of their biggest concerns? And how are you able to guide them right now?

BERT BEAN: It's a great question. So I, you know, everybody is a little bit different. Now, it does feel like we've gotten to the point where I would say the big first round of layoffs are sort of-- are sort of through, and people are just kind of waiting on the economic clouds to part. What we're noticing a lot, actually, is-- is culture is under attack, and all of our customers-- and they're really struggling with how do I lead through this crisis? How do I try to build a culture through this crisis?

And so something that we actually had planned to do later this year, we actually planned to launch a culture consulting company that we call Compass, and it was going to be a division of our company. COVID-19 hit. Those kind of plans, we sort of put those-- put those plans on the shelf.

But then we got to thinking, well, you know what? Maybe there's a need for this now more than ever. And so we've actually went ahead and launched this new division. It's called Compass. You can go to igcompass.com to-- to learn more about it.

And we're actually not charging anything for it right now. We'll figure out a way to kind of make money on this thing later. But-- but we feel that-- that we've learned a lot, and a lot has been a lot of soul searching ourself as a company to try to build a strong culture. And we feel that we can help our customers do that.

And so we're hosting online conversations and online webinars, and we're trying to teach leaders exactly how to maintain culture, and how to still encourage people, and how to be transparent, and how to lift people up, and how to really navigate through this crisis. We've got to have engagement. So I think that's one of the biggest things that they're struggling with is they're trying to all sort of pick up the pieces as to kind of where they stand now with the company being down, with having to do layoffs. And we're trying to do whatever we can to-- to help them with that.

BRIAN SOZZI: All right, let's leave it there. Bert Bean, CIO-- CEO of Insight Global. Thanks for coming on this morning.

BERT BEAN: Thanks, guys.