To close or not to close—that is the question organizations along the United States’ eastern seaboard faced over the last two days as a snowy “bomb cyclone” made its way up the coast. Whether it is snow, hurricanes, floods, fires, or something else, the increasing incidences of weather-related emergencies means leaders must carefully calibrate the financial costs of closing up shop against the motivational costs of staying open.
Obviously, losing a day of business is not a decision made lightly. Indeed, the costs can be tremendous. While no financial loss projections for the current storm are currently available, an IHS Global Insight study conducted in 2014 found that the costs a major storm has on a given state’s businesses and government is between $300 million and $700 million for just a one-day shutdown. But the costs of staying open in terms of employee morale and how they view the organization’s purpose and culture could be even more expensive.
“How leaders react during severe weather reveals what they value,” says Kevin Cashman, global leader of CEO and executive development at Korn Ferry. “Do they think first about performance or people?”
Cashman says that instead of looking at weather-related closings as a cost, leaders should consider them an investment in their people. Valuing people first will drive long-term engagement, loyalty, and, in turn, performance. Data shows that organizations can certainly do a better job with their workforces on the first two metrics—only about one-third of employees worldwide say they feel highly engaged in the jobs or organizations, for instance. Moreover, by one estimate, actively disengaged employees cost U.S. firms $450 billion to $550 billion in lost productivity per year, a figure that makes $300 million seem like not that much at all.
“If you show people you care, people will show you commitment, so closing for one-day is actually a small cost in return for the gain you’ll get from higher engagement from your people over the long-term,” says Cashman.
At bottom, it boils down to the difference between intrinsic and extrinsic motivation. Extrinsic motivation is a drive that comes from outside rewards or punishments; it’s what propels you to put in the extra hours so you can be eligible for a bonus, or so that you don’t have to get an angry 2 a.m. email from your boss. Intrinsic motivation on the other hand is a drive that comes from within; it’s the adrenaline rush you get from a challenge, or the satisfaction you get from nailing a presentation.
Put in the context of a weather-related emergency, leaders who put their people first are more likely to produce higher levels of intrinsic motivation in their employees. They will want to work harder because they know they are valued and respected. Besides, in today’s hyper-connected work, many people are more productive at home than they are in the office anyway. So taking a snow day could ultimately be one of the best decisions leaders can make for their organizations.