Managing staff costs during a recession is mandatory for the survival of the company. In addition any staff costs saved will immediately be transferred to your profits. This will look good for the company when your profits are padded somewhat. That being said, managing your staff costs during a recession should be carried out after a careful study. As much as possible the workers should be kept informed and involved about any pending cutbacks. You do not want your staff or workforce demoralized and guessing as to what their fate might be. Nor do you want the customers to be inconvenienced.

The first cutbacks should be to workers doing non-essential jobs that were recently added because of a booming economy. They are the least trained and the least necessary, and can be cut without any damage to manufacturing or service to your customers, who are the lifeblood of the business. If an increase in hours in a specific task is needed, let the hours come from the workers already on the payroll. This will make them feel more secure in their positions.

Assuming more cutbacks are needed, think it out carefully. How much the cost was for these workers to get experience. You would not want to have trained workers for your competitors. If the cost was substantial, it might be to your interest to furlough them at a percentage of their salary rather than cutting them loose. You will have a ready-trained workers should the economy start to improve.

Be prepared for the next downturn or recession which is inevitable. Any non-essential workers should be hired as part-timers to save the company the cost of expensive benefits, at least until an alternative government health plan comes into being. Perhaps outsourcing to cheaper foreign countries might be considered by your company.

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