No small business owner wants to cut employees. Providing a means to earn a living to your workers can be one of the biggest satisfactions from being a business owner. However, when the economy tightens up and cash flow slows to a trickle, layoffs always come up as an option just to stay in business.
Thankfully, there are ways to hold off layoffs that can help a small business survive until happy days are here again and still retain all the great workers you have. Here are a few tips.
Be Straight With Your Employees
At the first consideration of cutting back expenses, hold a company meeting and let everyone know the situation. Tell them that tough decisions might have to be made, and that while you will do everything you can to avoid layoffs, it still may be a last alternative. Keeping your valued employees in the “know” is much better than a surprise layoff out of the blue.
Overtime wages can add up quickly. Work to eliminate all your overtime work. Many workers may depend on overtime wages for their household budgets, but let everyone know that this step may be necessary in order to stay solvent.
In hard times, it is difficult to give a bonus to a manager while laying off another worker. Let your managers and all your staff know that bonuses may be eliminated.
Reduce Manger Salaries
Talk to your higher-paid managers. Let them know that in order to keep your employees, their salaries may need to be cut, at least temporarily. Many executives are willing to take a cut in order to save others from the unemployment line.
If your small business budget gets even tighter, offer to reduce hours for employees in order to keep them on staff. Their hours may go from 40 to 25 per week, but at least they can still earn a salary and retain any medical benefits for their families.
Lay Off With Dignity
If all else fails and you absolutely have to release employees, talk to them personally. Help them with a transition with unemployment benefits. Avoid “escorting” them out of the building. Give them the dignity to finish the day and avoid embarrassment. Your professionalism will go a long way in getting your valued employees back when you are at last able to re-hire.