Layoff has become a term that is all too familiar in today’s economy. In these uncertain times, many businesses are considering layoffs in order to improve their bottom line and keep their businesses afloat. However, layoffs are by no means an ideal solution. They increase the workload for existing employees and contribute to decreased morale. They also require a reprioritization of business objectives and may require you to drop some initiatives that could help your company grow. Layoffs should be the last line of defense in saving a business.
How Executives Can Avoid Layoffs
Hire the Right People
One very important way to avoid layoffs is to hire the right people from the very beginning. Demand for new employees can be stressful, leading to a rushed hiring process at times. However, the investment of time into finding the right people for open positions is very important and can pay major dividends. If you hire someone who is self-motivated and efficient, it will cut down on costs in the long run. Efficient employees eliminate the need for extra employees. Self-motivated employees will free your time up to focus on other areas of the business that could lead to more revenue. If you focus your time and energy on hiring the right people, this is a great way to reduce your chances of layoffs in the future. Employee retention is another important thing to consider. Losing employees can be expensive so keeping them around is a great way to keep your costs down.
Create New Streams of Revenue
Now may be the time to give those ideas that have been forming in your mind some attention. Have customers been asking for a specific product or service? Now is the time to offer it if possible. Find the most cost-effective way to introduce a new product that will fill your existing customer’s immediate needs. Gift Cards and promotions are a great way to provide increased revenue without any financial commitments. Do you have extra office space or could you create extra office space? Leasing out office space is a great way to create a new revenue stream in this environment. Someone with a small business does not want the commitment of a full office lease and will take that space off your hands without any financial burden to you.
Reduce Extra Costs
It is currently very popular to have a lot of office “perks” available to employees. Snacks in the kitchen, lunches provided, parties, swag, you name it. There are many ways that companies incentivize employees. This is a great thing and I think everyone can agree we love a perk. However, before a layoff, perks, and things should certainly go before people. Be open and honest with your employees about why you are cutting back. As an employer, let them know you care about their jobs and want to do everything in your power to protect them and prevent layoffs. Most people will happily give up their extra perks to save their job. That being said, this doesn’t mean that you have to take away everything that makes it fun for someone to come to work. A group shout-out board is a great cost-effective way to recognize employees for their achievements or milestones and will help keep morale high.
Marketing is another area where costs can get high. Consider reviewing your marketing budget and finding new and creative ways to market for the time being. It may create some work for your team, but it will be worth it.
If you have employees that travel for work quite a bit, find ways to reduce this travel. Zoom is a great option for meeting with clients from afar. Traveling is a big expenditure and will really open up your budget if you can reduce it.
Offer Voluntary Reduced Hours or Unpaid Vacation
Time off is a sacred thing in many people’s lives. It means more time with friends and family. It means taking a trip that they have been saving and dreaming of. It means giving their bodies and minds a much-needed break. Maybe it means getting work around their homes finished that they haven’t had the time to do. Some employees will value time off over pay. Many employees work hard with little time off or use their time off for sick time or taking care of sick kids. Sit down with employees and offer them unpaid time off or reduced hours. You will be surprised at how many people happily jump at this opportunity and how much money you will save without any negative ramifications. More time off has also been shown to increase employee productivity. It may also improve employee morale which is a total win. Give it a try and watch the magic happen.
Before you jump the gun and start laying people off, consider a hiring freeze. This is when a company stops hiring for any new roles. This is a way to not only reduce new salary costs, but it curbs costly training spending as well. The downside to a hiring freeze is that existing employees may get their roles expanded and more added to their plate. Again, open and honest communication is key here. Express appreciation for their willingness to help the company in tough times. Emphasize that this is being done to protect existing jobs. A hiring freeze may require you to figure out what initiatives are not contributing to the bottom line. In the long run, it can help you find what areas are just dead weight in the company and you can redistribute existing employees to areas that do contribute to the company’s health. It is important to not be too extreme with the hiring freeze as this can negatively affect the company. Zestimate.com recommends not stopping “the hiring process; just the hiring of nonessential staff. Recruiters should keep sourcing, attracting, and evaluating candidates in preparation for lifting the freeze.” This is important to keep your company strong afterward in terms of hiring.
How Employees Can Avoid Getting Laid Off
Articulate Your Value
Make sure you know what your value add is to the company and how that applies to the bottom line. Spend some time digging into what you do day to day, and make sure you can tie that to added revenue. You should be able to articulate this clearly to leadership. If you do not find that you are contributing to revenue, find a way that you can. Ask leadership what additional roles you can fill. Let them know you are available to take on more tasks. Often times when layoffs are impending, employers will start looking at each person and calculating if the business can function without them. Make sure you make it clear that there would be a gaping hole in function and revenue if you were to be laid off.
Determine Personal Goals
Set goals and meet them. Whether these are goals set with your manager or set for yourself. If we are actively seeking to be better, that will show in our work. People will take notice.
Best Foot Forward
Show up to meetings and work on time. This seems so simple, but it makes a big difference and trust us, people will notice. It is also important to add value to the meetings you attend. Don’t just sit back and observe. Be active and take a leadership role. Be prepared for the topic of the meeting and contribute. Add value where you can and do not be afraid to let your voice be heard.
All of this considered, remember that sometimes getting laid off is unavoidable. Be the best employee you can be, but don’t take it personally. Sometimes layoffs are just the name of the game and there is nothing you can do to avoid it. If you feel them coming, start prepping your resume and think about what you want to do next. That way, if the time comes, you will be ready to spring into action and take the next step.
Hopefully, you are able to find ways to incorporate the ideas above in order to avoid employee layoffs. Remember that people matter and their livelihoods should be taken into consideration before a layoff. If layoffs become unavoidable, be compassionate. It is always great to provide support through human resources for former employees to find new positions. However, we are confident that if you find ways to increase revenue and reduce costs, you can find a path around layoffs.