Given the current climate of the economy and the focus being placed on it, especially now that it’s being called a recession, many tens of thousands of employees are being laid off.
So it’s easy for businesses to, in a sense, want to “jump on the bandwagon” and use layoffs as the only method for reducing operating costs.
Sure, employees can be one of the most expensive facets of business, but they’re also one of the most valuable. That’s why it’s important to consider some alternatives to downsizing that could be more effective, while also reducing costs.
Employers need to stop looking at layoffs as the first “tool” out of the tool kit and take their overall situation into account. It may be more effective for the company to ride out the storm, rather than conduct layoffs.
One of the most common mistakes employers make, however, is being reactive and getting caught up in the frenzy of news reports that are predicting business failure without cost cuts and/or layoffs.
Employers have a tendency to follow the practices of other businesses they respect, rather than looking at what’s best for their own company.
Don’t get me wrong—Downsizing is an option when necessary, but it’s not always the first option you should consider.
Before a downsizing, however, employers need to take a step back and consider the overall picture. They should talk through their options with their management team before making any sudden decisions.
The employer and management team should put all options on the table and weigh them out before making a final decision.
For example, if a company is trying to cut costs, they may want to first look at reducing unnecessary expenses, such as excessive travel, the cost of utilities, etc. The company should question each expense to determine if it’s essential or just nice to have. The “nice to have” expenses should probably be the first ones to go.
With respect to employees, employers may also want to look at alternatives, such as job sharing, a schedule reduction or a temporary leave-of-absence.
Or, better yet, why not ask employees for ideas on alternatives to downsizing?
Employees may have some great ideas for adding value to your business that may help you cut costs, make money and avoid laying off your employees.
Also, a slow economy is a great time for a business to take a look at their current processes to see if there’s a better way of doing things. Use the existence of your staff to break down some of the processes and improve on them.
A slower business environment means there’s time to work on making your company better by:
- Finding additional ways to add value
- Seizing opportunities you may not have had time for in the past
- Improving your employees knowledge through training and development
Keep in mind that, although downsizing is a reality, a business still needs good employees, regardless of the condition the country’s economy is in.
If you want to develop effective alternatives to downsizing, at the very top level of the organization, you need to determine who the group is that might be laid off and how to get employee involvement in developing alternatives to downsizing.
Employees can often see places in your operations that might need some streamlining or some areas of “fat” that can be cut out to save some money.
I think it’s important for business owners/top management to show employees that they are looking for ideas from employees to create alternatives to layoffs and welcome any and all suggestions.
If you do end up using employee suggestions and creating alternatives to layoffs, you should also consider offering some kind of reward or recognition. Rewards don’t have to be expensive, just something small that will make employees feel appreciated.
By talking with your management team and asking employees for suggestions, you can easily come up with alternatives to layoffs.