Aug 072008

Everyone is feeling the pain of the poor economy, particularly small businesses. Keeping your valued employees is especially critical at this time. You can’t afford to alienate your customers by eliminating employees and diminishing customer service.

Consider the following before passing out the “pink slips”.

Eliminate nonessential meetings and travel. Critical training should not be eliminated, but consider local resources and on-line seminars.

Audit your office supply expenses. Employees need the tools to get the job done, but do you need 12 different colors of post-its and 6 different kinds of pens

Ask your employees for their input on how you can save money. Employees are more likely to “grin and bear” the necessary cuts if they have a say in how it is done.

Institute a hiring freeze. Ask for help in reassigning the job duties if someone leaves the company.

Consider a reduction in the work week for everyone.

If pay cuts are an option, be sure they begin with the owner and managers. Start by eliminating bonuses.

Request employees to take an unpaid vacation.

Become more economical when it comes to company luncheons, holiday parties, etc.

Remember to be upfront and honest with your employees. Layoffs should be the last resort for the business owner.

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  9 Responses to “Avoiding Layoffs in a Down Economy”

  1. Avoiding Layoffs in a Down Economy…

    [Source: effortlesshr Blog] quoted: Everyone is feeling the pain of the poor economy, particularly small businesses. Keeping your valued employees is especially critical at this time. …

  2. Please explain by saying “Request employees to take an unpaid vacation.”

    It’s my understanding that this would be a violation and goes against company policy if stated in contract, that employees are eligiable for employee paid vacation if employeed for a year and there after. How would asking for an unpaid vacation benefit the employee?
    Please help to clarify?!!


  3. I believe the issue is one of economic safety and that by asking an employee to take unpaid leave the idea is to save their job long-term. Many companies are doing this as are some state agencies. Of course, if you have a contract or labor agreement, you would need to discuss it with the individuals involved.

  4. Great post, thanks for sharing!

  5. Thats quite important. While you know the economic situation of your organization, employees should themselves realize what they can to reduce company’s expenditures that may include reducing resource consumption wherever possible as well as unpaid leave at extreme conditions. As this is hard for both, to get a new job for an employee and adjusting there as well as hiring new staff (when good times come back) and developing understanding.

  6. These are some key points you have touched on here. I was in a managerial position and had to lay off quite a few good employees. We tried to cut back on expenses in many ways, but ultimately the bottom line was that salaries were the big culprit in our business. It’s ironic that in the end I lost my position as well when the company went bankrupt.
    .-= Andy@Garage Floor Covering´s last blog ..Garage Floor Covering Ideas for Homeowners =-.

  7. I don’t think taking an unpaid vacation is appropriate but if the employer and employees agreed then it’s better. I hope the economy will start doing fine so that everyone can resume working and start reaching their goals.

  8. Another thought would be to motivate staff to work harder, think smarter. getting your sales force motivated and working hard will bring in more results, as a result the production team themselves will need to work hard and stay motivated too.

  9. I certainly agree that in times of economic recession, job duties should be reassign and talk to employees that this is now the time for them to take unpaid vacation.

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