It’s tough to be a small business these days, and many owners have been forced to downsize just to keep it afloat for as long as possible. To make the process go around and ensure that the ends meet, you’ve probably considered cutting down on one of your biggest expenses, such as your employees.
That the most important resources are also the most expensive should come as no surprise – and it’s exactly why you should work towards keeping your team safe from layoffs and focus on other areas instead. Who knows – maybe you’ll be able to save your business as well as their jobs.
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#1 Talk to your employees
Uncertainty is the enemy of trust and productivity, so you’d want to keep your team as up to date on the situation as possible. Explain that you’re trying to cut down on expenses and save as much as possible, ask for their advice on what they think you should do, and implement the insights they give you.
The amount of advice and insight employees are able to give business owners and managers comes as a surprise to many; yet, they are the ones at the frontline and will know better than any which processes you can cut down on to save money.
Even if they don’t have anything of value to point out, the fact that you consulted them before making any decisions will signal trust and steady leadership. It’s the kind of stuff that builds trust.
#2 Cut back on benefits
Before you consider layoffs, you should cut back on the management’s benefits as well as your employees’. Benefits are perfect for when it’s going swimmingly – in times like these, on the other hand, you need to increase your revenue just to survive. Increasing it may mean that you should research a few of the best banks for small business loans, before decreasing what you spend on benefits such as sick leave, travel compensation, and vacation pay.
You may want to consider implementing a requirement of working a certain set of hours before receiving paid sick leave – it’s only for a while, though, so explain that you’re doing this to keep the business alive. Read more about paid sick leave in this article, by the way, to arm yourself with knowledge.
#3 Reduced hours
Another excellent alternative to layoffs is simply to make your team work fewer hours combined. It can be tailored to apply to everyone in a certain department, for example, or scrambled together by a pool of volunteers who don’t mind working flexible hours. By managing this correctly, you’ll end up reducing the amount of hours they work, and you’ll save money without having to proceed with the layoffs.
Reduced wages is another alternative – perhaps a bit unpopular among the employees, but worth it if you need to boost the revenue of your company.
However unpopular the decisions you make are, focus on explaining it thoroughly to them, ask for opinions and advice, and – most importantly, be open and honest. Nobody enjoys the situation less than you do, and the support of your team will do a lot to take some of the stress of your shoulders.