A week or so ago I suggested the companies should look for ways to cut costs without laying off their employees. Layoffs are not only demoralizing to the entire workforce, ultimately they reduce efficiency. Reduction of efficiency can cause you to cut back on services to your clients. You can overload your surviving employees, increasingly the probability of mistakes. Ultimately, the domino effect can result in your losing clients. Not a good idea anytime, but especially during this economic slump.
According to an article in the New York Times more companies are looking for ways to avoid laying off employees. they are exploring the four day work week, unpaid vacations, and even pay reductions. Les money is better than no money at all. Companies are for the time being reducing or eliminating their contributions to pensions and 401K plans.
According to the article, many companies say they have been very selective in hiring. What with preemployment screening programs in place in most companies it would stand to reason, as they claim, that most of their workers are the productive sort and not the slackers. Many companies believe that since the economy dropped so quickly, it may come back just as fast. No sooner would they layoff their employees, then they would wish they hadn’t done so. The other bonus is that your not laying off employees builds the kind of employee loyalty no birthday or holiday parties will ever buy.
There are ways to cut costs in supply chain management. You can cut costs by making better deals with your suppliers who may not be thrilled about it but would rather keep you afloat. You can cut costs in materials, but using less paper, fewer office supplies. I remember working for one company that shipped brochures to trade shows. These were heavy boxes. So heavy they never would pay to ship the surplus back to headquarters. So be prudent.
In fact, do you even have to go to all those trade shows? Maybe. but in this economic downturn, how many of your clients are really showing up there? Even cutting back on one trade show and certainly cutting back on the executive conclaves, can save you some bucks.
So, as the article notes, it is wise to look for other cost cutting measures, before you layoff your personnel. and check them out before you hire.
