Finding Alternatives To Downsizing
Cut back on inventory. You may already have a balanced budget. However, try reducing your spending even more. The extra cuts in expenditures may save you a nice sum of money. After all, spending less is a safer bet than taking chances on turning a record profit. Remember that this is only a temporary, ‘rainy day’ measure.
Cut back on non-essential spending. There are usually some funds kept around for expenditures like client lunches, renting extra office space, or Friday happy hours. You want to keep your employees happy, but not at the risk of having to lay some of them off to continue providing free monthly lunches. They should appreciate your efforts, especially if you frame it as a measure to save their jobs as well as the company.
Reduce training budgets. It is difficult to expand your horizons without opening your employees up to new methods and ideas. However, you may need to temporarily suspend your training budget, especially if it is bloated. Your staff may even revel in hearing that a dull, time-consuming training session or retreat has been cut from this year’s budget!
Reduce your employees’ hours. This is a measure to save for last when trying to maintain your employees’ respect for you and the company. It is a difficult decision to make, because it directly correlates to their incomes. However, if you frame it as a job-saving measure, they should appreciate the fact that they still have a job and salary. They should also respect their coworkers enough to value their staying on board, as well. This measure is effective not only for downsizing caused by financial reasons, but for situations where efficiencies make extra staff redundant.
Get your employees involved in choosing downsizing options. While you still feel you can turn your losses around without cutting back staff, employ their help. Keep staff cutbacks off the table to avoid giving them a moral and ethical dilemma about choosing whether to cutback hours and services, or employees. Tell them that you are committed to saving the company and keeping them all on board. Giving them the option of what to keep and what to lose will help them accept the losses. Like the previous step, this measure can be used both in cases of financial downsizing and downsizing caused by efficiencies.
Softening the Blow
Tell each employee one-on-one. It is ok to announce staff cutbacks to a large group. However, don’t let there be a long gap between that the actual firings. Wondering whether they will be ‘next’ for weeks is horrible for employee morale. Bring in individual employees quickly and let them know why you are letting them go. It is important to let both your remaining employees and those being laid off why it is happening. Don’t give them the impression it was their own poor performance. Tell them the cost-cutting measures you implemented in the months leading to the staff layoffs. They will probably be upset at that moment, but will probably come to terms with your efforts. Tell them you could not save everyone’s job, and tough decisions had to be made.
Let them say goodbye. There is nothing more devastating on your remaining employees’ morale than their hearing a coworker was let go without saying goodbye. You should never clear out your office to let laid off employees exit, as if they were liable to make a scene. Instead, let them have a chat or two on their way out the door, and recognize that they may not say polite things. After all, their livelihood is in danger. Your remaining employees should respect the fact that you let them leave under their own agency and with dignity. This has to be carefully implemented in an age of workplace violence and terminated employees' reactions.
Help former employees with new opportunities. There are many affordable ‘outplacement’ packages on the market. You can give workers you lay off a new chance by setting them up with a severance package as well as job finding resources. Set them up with a job placement service that has ties to the industry they have been working in.
Controlling Collateral Damage
Work on maintaining the trust of your remaining employees. Maintaining worker loyalty is the catch-22 of running a business. Establishing a good, trusting relationship between you and your coworkers, and amongst themselves, is critical for increasing productivity. It also gives remaining employees a reason to trust you after layoffs. However, it also makes it psychologically harder on you and them when you have to make staff cutbacks. Though it may be hard, you have to maintain a good relationship with your employees for your company to weather a period of layoffs. Remember that employees have a loyalty to people over companies. Their decision to stay after layoffs has much to do with their trust in the company’s management.
Inform remaining employees when layoffs are over. You may have a thousand new worries on your mind, but don’t forget your coworkers. They will want to know that their jobs are secure. Take this time to reassure them that you have taken measures to stem company losses, and that their positions should be more secure as a result. It is time to establish a new level of communication with them.
Communicate your new expectations clearly. Staff cutbacks translate to unavoidable shakeups in staff responsibilities. Make sure everyone knows what you expect from them, and try to spread out the new duties evenly. Tell them you regret the added burden, but you are not exempt from taking on new roles. Make sure they know these are temporary measures.
Praise and reward your employees. Let them know you value their contributions to the company, and their willingness to accept new responsibilities. Even if you already praise them, find more opportunities to show your thanks. Find small ways to reward them, but don’t scare them with huge bonuses. You don’t want to fire someone’s best friend in the company and then hand everyone a check for $300.
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