Getting out of the hoarding business

Ecclesiastes 3:6 says there is “a time to keep, and a time to cast away.” Spring is traditionally a time to cast away unneeded items in an annual “spring cleaning.” But how can we discern what to keep and what to cast away?

If this is difficult at home, it is possibly even more difficult at work. Executives might easily understand why they shouldn’t keep too many papers: they clutter the desk or take up space in the office. But keeping too much digitized information, or even too much money or too many employees, can harm a business in more important ways.

Experts on both psychology and business shed light on how to think about keeping and casting away in a healthy and prudent way.

TRUST OVER ANXIETY

The first step of changing a hoarding habit is to recognize the roots of the problem. The habit of hanging onto too much stuff often stems from fear about the future and a desire to be prepared.

It’s only human to respond to an unstable economy and political landscape with anxiety, said Dr. Frank Moncher, a psychologist who works with the Diocese of Arlington, VA.

But Moncher says that trust—both in God and in fellow humans—
is an antidote to anxiety. “Most people are anxious because they’re fearful, they’re trying to control things,” he said. “To the extent that we surround ourselves with coworkers or people that we can seek guidance from, whom we can trust, then we don’t have to hold onto as much.”
 
After all, it’s unrealistic to think that we can avoid all evils, no matter how prepared we are. “We don’t want to store up our grains in bins, and have our lives demanded of us the next day,” said Moncher, referring to the parable of the rich fool in Luke 12:13-21.

If God has given us earthly wealth, he added, we should ask ourselves, “How can I trust Him enough to take prudent risks for the benefit, ultimately, of His kingdom, other people, and the community I live in?”

Moncher recommends trying to strike a balance when it comes to risk as with everything else. But when in doubt, he suggests erring on the side of trust in God. “[If] you can kind of stretch yourself, there may be some good that can come from that,” he said.

TOO MUCH MONEY

A 2022 KelloggInsight article noted that U.S. companies are hoarding more cash than in previous years. Sometimes, holding cash in another country helps a company avoid taxes; other times, executives simply hope to weather an economic downturn.

The first step of changing a hoarding habit is to recognize the roots of the problem

But is there such a thing as too much cash? According to Henry Kutarna, executive mentor and business consultant, there certainly is.

“If you have a publicly traded company, and you’re sitting on too much cash, there’s pressure to distribute that cash to your shareholders,” said Kutarna.

For private companies, too much cash can be an obstacle to being acquired. “If a company wants to take you over, it’s tempting to buy that cash, but at the same time, it makes the deal much more expensive, because they have to pay dollar for dollar for that cash,” he said.

Ultimately, Kutarna said, the ideal amount of cash on hand will depend on the company’s industry and margins, though all companies should have cash of at least three to six months’ expenses on hand.

What should executives do if they have too much in the bank? Kutarna recommends providing an employee bonus, raising wages, or giving a one-time contribution to pension plans. “Instead of hoarding the money, you could distribute it, and you could be supporting families,” he advised.

INFORMATION OVERLOAD

Information can be hoarded, too. In the 2020s, the question of how much information to store about customers is particularly important.

Laws like the California Consumer Privacy Act and the General Data Protection Regulation require companies to have a plan in place to delete information about customers at their request.
 
But some researchers have argued that companies should be cautious with the data they collect in the first place — partly because of the risk of costly data breaches, and partly because customers are growing skeptical of companies that collect lots of personal data.

In addition, Kutarna suggests considering whether there’s an ethical motive for collecting the data. “Is [the company] trying to be helpful to the customer to really respond to them, to build better products with better features? OK, fine,” he explained. “But if it’s [to] manipulate the customer or exploit them or to create an addiction… Well, now we’re straying into the illegitimate.”
 
He expressed concern particularly about companies collecting data to sell to other companies without the customer’s knowledge. “That’s a problem,” he asserted. “There’s a line in the sand.”

PERSONNEL PACK RATS

Recent news headlines show that many large corporations are laying off significant numbers of staff members. Is this a healthy spring cleaning, or a damaging trend?

Kutarna said it stems from over-hiring during good times, then having to cut back when expectations don’t meet reality: “We’ve got these people that went into a bull market,” he said, “and they just think it’s going to go on forever.”

Kutarna said he has coached clients to build some excess capacity into their staff in order to grow their business — but not too much. “I’m all about balance… and also, not believing that the economic cycle is never going to switch,” he said.

“Don’t be greedy. Don’t create so much excess capacity that, when the cycle changes a little bit—we go into recession, we’ve got inflation—now suddenly, you have to fire half or 30 percent of staff,” he warned.
 
But what about “labor hoarding” at overstaffed companies? Some employees might not have enough work to do or aren’t challenged to grow in their jobs, which caps their professional development. “That’s unjust in its own way,” said Kutarna. “They should be productively employed somewhere else.”

At times, letting someone go—with adequate severance—is the right move.
 
“As employers, we have the responsibility to watch carefully so that when we hire people, they are challenged, they have legitimate work,” he said.
 
“And then we contribute to their families in a fair, just, and honorable way.” 

The ‘Catholic’ way to do layoffs

Clinical psychologist Dr. Frank Moncher has advice on the compassionate way to end a relationship with an employee:  “Build at least half the bridge” to the employee’s next career step.

That bridge should include severance and extra time off to look for a new job while winding down the old one. But most of all, he emphasized the need for closure, both for the employee who leaves and those who lose a colleague.

“When you let go of someone on a Friday afternoon, you set them up for a weekend perhaps of loneliness and despair,” Moncher said. “Psychologically, a lot of bad things can happen, both for themselves and for their family, or even for other people.”

He recommends giving the employee notice, just as the employee would be expected to give notice before quitting. “That’s the kind of thing I think a Catholic employer might do differently [from other employers],” he suggested.

Finally, he recommends that executives who need to reduce staff be transparent, admit any mistakes they made that led to the situation, and provide terminated employees with honest feedback:

“To the extent [you] can, have those conversations with people on the way out the door: ‘These were your strengths; these were the reasons that I really wanted to keep you. And these may be the areas you can grow in that would have made it possible.’