Cutting Costs: How To Avoid Employee Layoffs

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Cutting Costs: How To Avoid Employee Layoffs

There is a multitude of reasons why a company may need to scale back to save money. Salaries are a big chunk of a company’s budget and often the first thing to go when times get tough. The trouble with that option is that those good employees are hard to replace when the business bounces back and they need workers again. To gain trust and maintain loyal workers, consider how to avoid employee layoffs by exploring other avenues in which the company could scale back and save money.

Hiring Freeze

Maybe the issue in the company is that there aren’t enough employees, or roles are changing, and additional positions need filling. Instead of hiring new people to fill new roles, even if old positions are no longer needed, it’s more cost-effective to move people around and train where necessary, rather than go through the long route of hiring a new batch of people. New employees cost more in time and training. Stop hiring and work with the employees you have.

Freeze Salaries and Benefits

You’re a great manager and want the best for your employees, but now isn’t the time to give raises and increase benefits if the company isn’t doing well. Remain transparent and honest with your employees and they’ll respect the decision, knowing it’ll save their job.

Incentives To Leave

If cutting the number of employees is the only option, then offer incentives to leave in case there are those who would be thrilled to go if they’re taken care of. Things like severance packages cost a bit upfront, but they save the company money in the long run while helping an employee survive the transition.

Downsize the Office Space

To downsize office space and save on rent and utilities, allow employees to work remotely when possible. It may be the upkeep of the office along with employee needs that’s creating unnecessary costs. Remote employees have shown the corporate world that they’re happy and satisfied at home, and they’ve proven that production actually increases greatly.

Let the Temps Go

Temporary employees are often a lifesaver. However, in the case of a possible downsize to cut costs, release the temps first, since they expect a temporary position in the first place. Fulltime employees can cover what the temps were hired for.

Cutting costs in business is often an ongoing occurrence, but sometimes it becomes an emergency for the company to survive. Your employees are the heartbeat of your business, so do all you can to avoid employee layoffs.