Editor’s note: The opinions expressed in this commentary are the author’s alone. Jennifer Libby is a district manager with human resources provider Insperity’s Kansas City office. Click here to read more from this contributor.
Jennifer Libby, Insperity
Economic turbulence can be daunting for both business owners and their employees. In times of financial uncertainty, layoffs can soar. While they may seem like a quick fix, staff reductions can negatively impact a business’s day-to-day operations.
A reduction in staff can have a damaging effect on workplace culture. If layoffs are not communicated carefully, employee morale can take a hit and distrust may rise. Employees may start to believe their jobs could also be on the line, creating a feeling of anxiety about their future with the company, which may prompt them to look elsewhere for employment.
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Business leaders should take this impact into consideration and thoroughly explore alternative options before resorting to layoffs.
Review salaries and staff structure
C-suite executives and upper management may need to consider temporary salary reductions if the organization’s downturn is short-term. For more dire situations, job sharing is another avenue to consider. Employee numbers remain the same, but through job sharing, two part-time employees perform a job that is usually fulfilled by one person. This leads to a reduction in per-employee income. A third option to potentially pursue is implementing furloughs, which can give employers a chance to see if permanent layoffs are necessary.
Revise schedules
Businesses should also look to remote, hybrid and flex work options, if applicable. This would save on operating costs such as real estate expenses, in-office perks, travel expenses, and other expenses associated with physical locations, providing budget enhancement to avoid layoffs. An additional option is introducing a four-day work week, which reduces hours and salaries. These options may also help improve employee morale and enhance work-life balance.
Reduce perks
While reducing benefits may seem like a logical way to cut costs, the reduction can have long-term ramifications to morale and the company’s ability to attract talent when the time comes. Therefore, be cautious when considering the option; employees need benefits and want perks. Rather, scrutinize added perks for the entire workforce, which could assist with the bottom line.
Rethink workflow
Employers should reevaluate company processes and workflows to ensure efficiency. This is a good time to review productivity. Employers may discover some employees are more productive in different positions or a process could be streamlined. Project management software is another alternative to help refine processes. Leaders can also lean on employee feedback to help identify gaps and redefine strategies. This could be done by having employees review their job responsibilities and find ways to make the tasks more efficient.
Tough decision making is necessary in business, but layoffs should be a last resort. Business owners are encouraged to be open and honest with employees, especially regarding the state of the business during trying times. Transparent communication during economic uncertainty is critical to retain employees and create the optimum situations for the business to not only survive but thrive.
Jennifer Libby is a district manager with Insperity, a leading provider of human resources offering the most comprehensive suite of scalable HR solutions available in the marketplace. For more information about Insperity, call (800) 465-3800 or visit www.insperity.com.
