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Alternatives to Consider When Downsizing

Tips For Laying Off Fewer Employees


One of the biggest expenses for many business owners are the costs associated with hiring, training, and maintaining employees. When companies downsize, one of the first places they look to trim costs is by reducing the number of employees.

Before laying off employees, be sure that you have looked at all the options, including asking your employees what they would be willing to make sacrifices for the good of the company. Employees can show surprising loyalty and flexibility for the good of the company – and to save their jobs when being faced with downsizing or layoffs.

Because employee morale will always be affected when a company downsizes, it makes good business sense to allow employees to chime in with their opinions and feelings. Few things make employees feel less valued than to surprise them in a meeting or memo that people will be let go.

Your employees are in the day-to-day trenches. They may have ideas on how to save the business money, or be willing to give up benefits, change their hours, or make other accommodations in order to keep their jobs.

Never underestimate that value asking your employees for ideas. Even if their ideas do not make good business sense and cannot be put into action, you, as the employer will have demonstrated to your workers that they matter. This morale booster may prove beneficial to employees who remain in your employment, especially if their job duties increase as a result of laying off other workers.

  • Offer Job Sharing: If you can combine the skills of two employees into one position, job sharing can help both employees keep their jobs but will cut your hourly wage costs. This may not work for all employees, but for some, reduced hours may be a preferable alternative to losing their job.

  • Cut Back on Employee Benefits: Most workers need their health insurance benefits, but other benefits like vacation pay, sick leave may be able to be trimmed down, or your policies can be revised to make them more cost effective.

    For example, requiring employees to work a certain number of hours in order to accrue paid sick leave, rather than offering it all up front, can spread the costs out over time. Paid Sick Leave – Is it Required by Law?

  • Change Your Work Week: Many local governments throughout the country save money by staying open for business four days a week instead of five. This saves on salaries as well as operating costs.

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