In the height of the COVID-19 pandemic, over 26 million Americans filed for unemployment benefits within five weeks.
Unfortunately, layoffs are an inevitable part of business, especially when the economy is hit by something as drastic as a pandemic. Many companies are still at a crisis point, and company downsizing affects millions of workers.
However, did you know that there are other options? If you’ve been stressing about which of your valuable workers you need to let go of, you don’t need to! Instead, implement some of these other practices to avoid redundancies.
If you’d like to know what your options are, read on!
1. Reduce Hours
During an economic crisis, employees worry that they will be laid off due to company downsizing. There’s no point trying to hide it from employees if this is a possibility.
Instead, implement a ‘work when you want’ policy but cap it at a maximum of 40 hours per week. You’ll find that many employees opt to reduce their hours (and therefore, pay) by choice – saving you money.
If employees don’t take you up on voluntary reduced hours, you can try cutting them each by five hours per week. This won’t make a significant difference to your workers but will provide you with extra funds to help you avoid downsizing.
2. Cut Unnecessary Expenses
Next, review your expenses policy. If your employees get expensive hotels and fancy dinners for evenings with clients, it’s time to make some adjustments.
Make it clear that your expenses policy applies when business is booming but must be scaled down at other times. Implement a virtual meeting policy to save on travel expenses.
3. Renegotiate Contracts
Next, consider cutting costs that won’t affect your employees. Review each of your contracts with suppliers and manufacturers. Meet with each of them to renegotiate fees.
Even if you can’t save substantial amounts from each negotiation, imagine how much extra cash you’d have if you cut only 5% off the cost of each contract?
Don’t be afraid to brainstorm cost-cutting options with your contract manager. Suggest alternative options such as reduced services, scaled-down production, a short time discount, an extended contract.
4. Apply for Government Support
Finally, don’t forget to look out for government handouts. Many grants, loans, and tax relief options are available for businesses.
Even if you thought you’d already claimed everything available to you, check again. There are many COVID-19 specific schemes you can claim, such as the ERC extension at erctoday.com.
How to Avoid Company Downsizing Explained
If you don’t want to join the masses of company downsizing, you don’t have to. Just be upfront with your employees and tell them where you’ll need to cut costs to keep them on.
Although it’s an uncomfortable time for everyone, they’ll be grateful to know that their jobs are secure.
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