Before laying off employees, consider how much layoffs will cost your company in the long run. On top of paying severance, alienating employees and risking litigation, the morale hit may hurt productivity among survivors. Plus, when business improves, you’ll be saddled with the cost of recruiting and training new employees.
Here are some alternatives to layoffs:
Ask employees for ideas. Solicit suggestions from staff about how to cut costs and improve productivity. Even if what you save doesn’t meet your shortfall expectations, getting employees involved can ease insecurity and promote solidarity.
Cut out the extras. Freeze additional hiring and cut bonuses, raises, unnecessary travel and overtime. Postpone non-vital equipment upgrades. Nix office perks like bottled water and seasonal office parties, or find cheaper alternatives.
Offer extra days of unpaid leave. Extra vacation time is something many employees will find agreeable, even if it’s unpaid.
Exchange workers with other employers. Larger companies do this within their own umbrella of subsidiaries. Smaller firms can choose partner companies or vendors. Ideally, the host firm would pay employee salaries and get the use of a skill set like marketing that it might not have on staff. The mutual benefits are a cross pollination of skills, retention of employees and temporary wage relief.
Institute shorter work weeks. Reduce the number of hours employees work and proportionally decrease pay. This can be a seasonal arrangement for slow periods.
Consider a virtual office. You can free up office space to rent or downsize by keeping essential staff onsite and sending everybody else home to work remotely. Off the shelf software packages can bridge the Internet divide by allowing managers to video-conference with employees, or keep tabs on them.
Consider wage or benefit cuts. Such moves go over better when they start at the top. Some experts say it can help pad the blow if senior management takes a bigger cut than the rest of the company. You can also offer buyouts for employees with longer tenures.
Cut part-time staff and contractors. If it comes down to this, it’s legally easier and cheaper to end their employment or rehire as necessary. Instead of using costly temps to fill gaps, consider rehiring retired employees that already know your business practices.
Read the original article on asia.WSJ.com at
Copyright Dow Jones & Company, Inc. Republishing and editing are forbidden without authorization from Dow Jones.