The first obvious sign of an economic crisis is personnel downsizing. When quarantine just began, experts started talking about mass unemployment. In part, their predictions became true. At the moment, the number of unemployed people increases. The turnover of the business becomes lower and most companies try to reduce expenses, by downsizing the personnel. But this isn’t the best way to reduce your expenses.
Keep reading to discover 6 effective ways to reduce expenses on staff.
If your workers don’t have enough duties at that moment, consider changing their responsibilities. You can force factory workers, for example, to maintain equipment. Small businesses can try a similar way of saving money. They can allow their employees to do the work for which usually the additional staff is required.
These changes are likely to upset some workers. But if you tell them that these changes are temporary, they will appreciate your resourcefulness and desire to improve work.
2. Overview of alternatives
When the issue of a crisis is on the agenda, you should go to your staff for advice and listen to their suggestions. They may have good ideas that can help you save money. For example, a specialist who sees the workflow from the inside may notice that certain work methods are ineffective. Thus, you will be able to abandon or change them for a while to reduce expenses.
3. Voluntary withdrawal
Downsizing isn’t always a mandatory process. You can ask your employees to consider the option of taking voluntarily unpaid leave. It is most likely that one of the employees already thinks about the dismissal. If so, then the crisis is the most suitable moment for this. It’s better to dismiss those employees who want or can go, instead of firing everyone.
For some people, free time is a good opportunity to take a long-awaited vacation, spend time with family, or work on a personal project.
4. Material compensation
You may consider different forms of material compensation. For example, you can offer your employees unsold goods or a significant discount on services. You can even offer the remaining employees a small part of the company. In addition, if the firm cannot afford at the moment to make standard payments, it is possible to exempt employees from certain payments.
If you have a corporate canteen or recreation center, offer these benefits to your employees. It will cost you much cheaper. The main thing is to convince your employees that these are forced measures and their usual bonuses will not disappear forever.
5. Reduced working hours
Reduced working hours is another way to reduce expenses in staff. Some companies have already introduced a similar practice during the pandemic. During a crisis, many businesses really don't need a lot of staff. In such situations, they often dismiss employees. But this can cause additional expenses. You can dismiss employees if you can refer their responsibilities to someone. For example, you don’t need to pay a full-time accountant if you can contact the best CPA firm Sarasota only when you need this.
6. Reduced salaries
One of the ways to reduce expenses on staff is to lower their salaries. This can lead to employee dissatisfaction. But if the company at stake and you can completely lose the income, then a decrease in wages is a better scenario. The key to reducing employee dissatisfaction is to involve staff in the discussion. This should be an open conversation with an explanation of the situation in which the business has no other way to survive.
While dismissing the employees is the easiest way to reduce expenses on staff, it is better to choose another option. You can try one or several of the strategies mentioned above to expenses on staff without dismissing them.