The two major things we’ve been discussing with leaders right now is how they can take care of their humans and what they can do as an organization; and to really think about that last one.

What can you do? What’s possible? How can you take care of your people in terms of policy, actions, non-traditional support? How can you pivot your business to offer something the world needs now to keep people employed?

Target recently announced pay raises, bonuses, and a new paid leave policy. Marriott International, Virgin Atlantic Airways, and Delta Air Lines have all announced a plan to furlough tens of thousands of employees, which would keep them on payroll without pay. Countless small businesses across the world have had to resort to layoffs, one of which announcing this very reluctant action only paired with a detailed plan to bring back their people one by one.

These are all examples of organizations asking themselves what they can do right now and coming to very different conclusions. Variations in industry, size, current demand for a service/product, and many more considerations  should be taken into account by all leaders to take care of their people and preserve a business for them to stay at or return to.

When considering your options in this unprecedented time, your most important asset may seem like your largest expense, but there are many ways to reduce costs before reducing your workforce. Here are 40 cost-cutting tactics to consider before deciding on a layoff:

Take Advantage of Financial Relief Currently Being Offered

1. Small business relief and loan resources: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

Reduce Payroll/Staff-Related Costs

2. Institute a hiring freeze for all non-essential positions

3. Freeze salary and benefit Increases

4. Eliminate all overtime

5. Protect employee positions by eliminating contract and temporary positions (most temporary workers would expect this in times of business changes and cutbacks)

6. Take advantage of cost savings from normal employee attrition by waiting to replace roles (where possible)

7. Offer early retirement and ask for voluntary departures for eligible employees  

8. Present buy-out options to employees with longer tenures

Scheduling Changes & Furloughs

9. Shorter work weeks

10. Role sharing (responsibility and pay temporarily shared/reduced)

11. Full-time employees move to part-time

12. Offering furloughs for employees who may volunteer for this option (AKA unpaid leave)

13. Mandatory furloughs if this is a necessary option

14. Temporary shutdown (for a short duration)

15. Offer unpaid sabbaticals that span longer time periods than furloughs

  • Unpaid or partially paid time off
  • Employees generally have expectations to be rehired
  • Benefits continue
Total Rewards Reductions

16. Reduced pay rates

  • Although you may risk losing key employees, it’s an option and can be temporary
  • Consider temporarily decreasing the pay of senior leaders to demonstrate unity
  • Consider pay reductions across the board for all positions

17. Temporarily suspend company 401k match or other retirement contributions

18. Suspend or reduce benefits contributions

19. Suspend all ancillary employee benefits (I.e., tuition reimbursement)  

Other Expense Cuts

20. Cut out extras and perks (drinks, food, events, gifts, etc.)

21. Remove discretionary spending (like corporate spending, subscriptions, memberships, per diems)

22. Remove credit card expense accounts

23. Postpone non-vital equipment upgrades

24. Solicit suggestions from your team on how to cut costs

25. If possible, go virtual by moving your office to a virtual setting to reduce or completely cut the overhead costs of a physical space

26. If going virtual is not an option, downsize your office space to a less expensive option

27. Sublet your office space

28. Sell assets to reduce storage costs and bring in cash flow to protect your workforce

29. Introduce a worker exchange program – partner with another company to share an employee

30. Cross-train employees to fill in skills gaps rather than hiring for those skills

31. Renegotiate contracts with vendors, suppliers, contractors, and other associates

32. Cancel month-to-month or flexible agreements that aren’t essential to the business

33. Look for automation for how you’re using people to see how you can do more with less

34. Go paperless (if you haven’t already) to reduce printing and mailing costs

35. Reduce your expenses and slim down the operating margin where possible

36. Pursue outside funding from investors and/or private equity

37. Focus on organic marketing and the power of word-of-mouth; cut back on paid advertising

38. Negotiate with creditors

39. Revisit insurance packages

40. Try bartering instead of acquiring inventory, merchandise, and other assets on credit

As with all instances of organizational change but especially with changes of this type, we can’t overstate how important clear, transparent, and timely communication is.

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When at all possible, avoiding a layoff is ideal. However, we know that layoffs do happen and that they can be handled in a very human, empathetic, and expeditious way that cares for your people while quickly moving them on to their next opportunity.

If you’ve had to make this difficult decision for your organization, our Humanized Career Transition Portal has support options that start free for small businesses under 50 employees and non-profits. Learn more here: Virtual Humanized Career Transition or reach out to info@livingHR.com for support.

Be well and stay human,

The livingHR Team

Sources:

The Balance

Harvard Business Review

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