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How to Reduce Costs and Avoid Laying Off Your Staff

How to Reduce Costs and Avoid Laying Off Your Staff

The competition is fierce in the market and it requires a lot of resources to stand strong. The time for every business does not remain the same throughout its life. There are ups and downs, and it is important for every business to know how to stay focused when the time is in their favor and how to tackle the situation when it is not. We can take the current situation as the best example as COVID-19 is killing businesses all over the world and threat is on the job security of employees. 

Besides such pandemic, there are also businesses that see such a worst time in their lifespan that apart from firing their employees they don’t find anything else to manage the expenses for staying in the hunt. 

We can understand that sometimes the situation is worse and instead of cutting the cost companies find no better option than letting off their employees. But you need to remember that by firing your employees, you are also letting off their experience and loyalty. You might hire new employees later on at a lower cost but getting the experience could not be so easy.

Thus, you need to know some alternatives by which not only you can save the cost but also retain your valuable employees. You might be wondering how it will be going to happen but yes, there are certain tactics that can help you cut cost without laying off your staff. Reading this post will help you know the strategies that could save you the valuable experience of your employees in the time of crisis along with saving money.

Tips to reduce cost without laying off your Staff

  • Reduce working hours

This could be one of the best strategies that one can adopt during the crisis as your employees will agree to work for lesser hours at a lesser wage for some time rather than not working at all for nothing. This implies to make your full-time staff work part-time until the situation becomes better. The theory here is simple, that at the cost of one employee, you can retain two and that too with the experience. In this way, you will save the cost and your employees could save their job. 

Considering this is a good idea to save money along with the key experience & loyalty of your current staff. If you are running a large business, then this tactic could be a defining factor in saving a lot during tough times. 

Remember one thing, be clear while implementing this to your employees so that they ensure that their job is safe and it’s only the unfavorable time that company is facing. Doing this will not affect the deliverability or efforts of the staff and you can make sure that they are working dedicatedly. 

  • Reschedule working plan

Another defining strategy that you could adopt to keep your employees on board while managing all your business’s expenses is changing the roaster. There are businesses with outcomes changing on a day to day basis. If you are engaged in such a business and facing a financial crisis despite doing everything required, then chances are that you might be missing out on days that could deliver better than others. This is because you might be following a standard Monday to Friday roaster plan. 

What you can do is try out a different working plan for your employees and keep weekly off on days that are less productive. This could work well and you might not even require to laying off your staff.

  • Let temporary employees go

Most businesses hire employees on contract to get a specific job done and after that, it’s not mandatory to keep them. Thus, to save the cost you can let your contract-based employees go as they will not raise any questions because they are already aware that their position is not permanent.

This will help you cut the cost while retaining your regular employees who are dedicatedly working with you for years. 

  • Unpaid furloughs

During the time of crisis, even employees want to switch on their own but not all. There are people in the organization who served it well and want to stand alongside during tough times as well. They understand that time is not always in your favor and bad times do arrive, thus, they will give their consent on the decision you will take to save the company. 

The next best thing that you can do to reduce costs without saying goodbye to your staff is to encourage some unpaid leaves. This might sound strange to some of your staff but it is a better idea than laying off completely. 

Another tactic with unpaid furloughs you can do is reducing working weeks a month or working months a year. What we want to say with this is, that you can reduce working weeks to 2.5 to 3 per month or working months to 8 or 9 a year. This could be a little bit harsh but with this not only you will save the cost but also the valuable experience of your employees. 

  • Cut a small percentage of salary

Salary is for what we all work dedicatedly to meet our expenses and ensure the growth of the company along with our growth. While cutting the salary when your employees have not done anything wrong could be a harsh option during crisis time. 

While if we talk about it keeping job security in mind, then retaining staff at a bit lower salary could be the best idea than completely laying it off. Don’t forget to compensate smartly for the salary cut that costs you nothing to ensure employees that you are doing it due to the financial crisis not intentionally. 

  • Reconsider PPC advertising

An effective PPC advertising campaign requires some handsome amount of money to generate genuine leads. There are businesses that rely mostly on PPC  campaigns for generating leads and for that, they also spend a lot.

Now, when the time is not in your favor financially you need to rethink and re-strategize your PPC campaign. In simpler words, we should say that you need to cut the cost of PPC advertisements a bit. This could be a better idea than laying off your loyal employees. 

  • Early retirement

This could be another strategy for reducing costs. You can offer some exciting incentives to people who are about to retire within a couple of years or so to retire early. As such employees are generally the highest-paid ones, hence, doing so will help you save a lot and will also be beneficial in the long run. 

Here, you need to remember one thing that you need not top force them to leave, it should be just an offer for the voluntary exit. And before taking this step, you must make your team stronger by giving training or so because the employees you will ask to retire are the most valuable ones and that might weaken your team. 

These are some of the ways by which you can not only retain your loyal employees but also cut the cost to manage expenses during the crisis time. Considering the strategies that fit you best will be really helpful in the long run and you don’t have to let go of the experience of your hard-working employees. 

Summing It Up

A business needs to be financially strong to tackle adverse or tough conditions without falling off and that is the reason why most of the companies start to saturate their team by laying off your staff during a crisis. But it is also important for businesses to know that without the experience of employees they cannot do well and only staying in the hunt is not the solution, they need to grow as well. 

The only cost reduction most businesses see is the salary of employees by firing them, but we must say that this is not ethical. Saying employees to leave the job without any valid reason is not a good idea and this might create trust issues in other staff as well. 

So, it is necessary to know some alternatives by which the cost can be cut and you can also retain your valuable employees. This post only focused on making you aware of some strategies that can help businesses during unfavorable conditions. Implementing the appropriate ones will retain your experienced staff along with their dedication and trust, plus you will save enough to come out through the time of crisis.