Yesterday I talked with a CEO client, one of the smartest, most positive and respected executives I’ve ever worked with. He, like most CEOs today, are creating plans to slash expenses, people and programs. “I’ve been through a number of recessions, but nothing like this,” he explained, with not a trace of optimism.

The greatest challenge is treating people who are losing their jobs humanely and with dignity. The second challenge is keeping remaining employees engaged during such uncertain times. A Gallup poll shows that companies with engaged employees grow earnings 2.6 times faster than those that don’t. In this economy, that may mean that companies with engaged employees make it, and those without  will not.

Here are eight communications suggestions for these difficult times:

1. Create  online alumni communities ASAP – a place to help find new jobs,  provide encouragement and support, get financial advice on how to keep life together, etc. You can be up and running with  Ning community in less than 30 minutes for less than $30 a month.
2. Don’t paint a rosy picture on a bleak landscape: people know things are bad, don’t pretend they are not.  Be clear about your business situation and what you believe the company needs to do to survive and come out stronger.  For every action, help people understand the why behind it. You’ll earn more trust by being real vs. trying to put a “good spin” on a difficult situation, that will continue to be fraught with uncertainty for at least another four fiscal quarters, if you can trust the economists.
3. It’s not about transparency, it’s about fairness and caring: Employees must feel that you care about their personal well-being. A recent Harvard study found that “even well-meaning organizations can destroy trust if they are perceived as being fair but callous.”  Get out of the office and into the field with your employees so that you can both experience their worlds and show that you care and that all the HR  “employees first” mantras are more than just rah rah.
4. Tie every decision to your corporate values: take out those values and use them as the guide for making decisions and communicating.  If you really believe the values, they will guide executive decisions in a way that will resonate with all your stakeholders, particularly employees.  In making announcements, explain to people how the decision supports the organization’s values.  And if the values are not helping to guide decisions,  you know that the vision/value exercise was a failure.
5. Start with managerial incompetence: the largest driver of employee trust, according to the Harvard study, is managerial competence. In looking where to reduce staff, don’t simply cut by salary range or management level. Make sure you keep the A players, and excuse the mediocre. This will earn trust and motivate employees.
6. Put Enterprise 2.0 tools in place to make it easier to work: with fewer people needing to do more work, make it a priority to provide company-wide 2.0 tools (wikis, blogs, communities, forums) that make it easier for people to find help and resources within the company, collaborate, solve problems small and large, and connect as people with other people.  Most of these tools are inexpensive, easy to install and require little training.
7. Sit in the chair: last year a communications manager of a large retailer put two chairs in the company lobby and made herself available to employees who wanted to sit and talk. The response was overwhelming. (Read more here.) Sometimes small gestures go a long way, especially in such stressful times.
8. One point at a time: My tennis partner, a financial CEO,  and I were recently getting crushed in a match. He came over and gave me this advice: “Take it one point at a time.” We did, and we came back and won.  In such stressful, uncertain periods this same advice may be good for business as well.