Companies need to get better at explaining to employees the intrinsic risks of their jobs, according to forecaster and essayist Paul Saffo.

Topic: Advice on Letting Employees Go

Paul Saffo: You know, the best way to let people go is to let them know when they’re hired that it’s an uncertain environment and that their job is always at risk and even if you let them go, it’s not that you don’t love them.

We do this quite well here in Silicon Valley. The economic bargain when you join a startup company is you know it is a risky proposition and the company may not exist and if it doesn’t, there’s no expectation of lifetime employment.

So I think companies over the last 10 years have done a very bad job of explaining to their employees what the intrinsic risks are. All I know is, if you wait until you let the employee go to deal with the issue of how do you communicate to the employee about being let go, it’s too late to do anything.

Question: How do you maintain the morale of the employees that remain?

Paul Saffo: Clarity in this period of uncertainty is absolutely essential to employee morale and the clarity goes not just to how long their jobs would last, but to the nature of the job. Look at the deep transformation in what a job is, and how it’s changed over the last couple of decades.

Conducted on: June 18, 2009.