The goal of any business is to efficiently and effectively offer its services or products to the customer and maintain a profit. However, with the unstable economy and tighter budgets, many businesses are seeing a decline in profits. In a panic, they may initiate mass layoffs, which can in turn hurt the business’ reputation and overall employee moral and performance. According to the Bureau of Labor Statistics, the national unemployment rate was 9.6% in August of 2010. Before making the decision to become another statistic, consider these 10 ways to prevent layoffs:
1. Hire Properly
While it may be difficult to find good workers, they are out there. Spend the time during the hiring process to hire the most qualified applicant. One or two inadequate employees can quickly bring your company’s performance and sales down.
2. Create a contingency plan
If your company does not already have a contingency plan, develop one now. During an emergency situation, it is much better to have a well thought out and developed plan over a quickly devised scheme.
3. Negotiate pay
Unless in a set contract, it may be beneficial to consider lowering employee pay for a certain amount of time. Although employees may initially become angry, chances are they will take a lesser pay over no pay. Consider offering repayments or bonuses when business picks back up.
4. Lower benefits
Often times offering health insurance and other benefits to an employee can be detrimental to small and even large businesses. Consider asking the employee to contribute a larger portion. In dire situations, it may be necessary to lower benefits. Like pay cuts, cutting back is better than laying off.
5. Offer unpaid vacation time
During the holidays or even over the summer months employees may just want to spend extra time with their families and children. Your company can save money and the employee will return well rested from a short vacation.
6. Offer early retirement
Rather than laying off several employees, consider offering a severance and early retirement option to a top employee near retirement age.
7. Layoff alternatives
Communicate with the employees and find out ways to save money and prevent layoffs. Perhaps you could eliminate the daily coffee and drink service. Or, perhaps you could eliminate the weekly Friday lunches. The employees will offer honest feedback that will provide you with an idea of what they are willing to sacrifice in order to maintain their job.
8. Hiring freeze
Consider enacting a hiring freeze until business picks back up. This will allow the company to consolidate several positions or departments. It can also serve as an opportunity to restructure departments. Also, if an employee does retire or quit, you don’t need to necessarily replace their position. Instead, you could divide the work between other employees. If you choose to do this, remember that you may need to adjust salaries for employees absorbing a larger workload.
9. Offer part-time work
Full-time employees may jump on the idea of going to part-time status for a set amount of time. Continue to offer them benefits and a fair pay. When business does pick up, you will have a number of skilled employees ready to return to full time.
Communicating with your workers is very important during this time. They are well aware of the economic conditions and probably fear layoffs. Be open and honest with them. They may offer ideas or even cut backs that you hadn’t considered.
While every business wants to avoid layoffs, it is sometimes inevitable. However, you may be able to prevent layoffs by following some of these tips. When the economy starts rebounding, you will be glad to have kept your valuable, experienced employees.