Recession doesn’t have to mean layoffs. Here are some creative ways to avoid redundancies without firing employees.
As we experience an economic recession, companies worldwide have had to make changes to stay afloat. This has included reducing product size and quality as well as initiating hiring freezes and layoffs, all in the name of eliminating redundancies. Redundancy typically refers to a scenario where too many employees are doing the same job or when a specific position is no longer required in a company.
In standard human resources terms, redundancy can be the reason for the dismissal of an employee or a group of employees from the company. What most may not realize is that there can be several other ways to cut costs besides layoffs. Here is a list of some of the things you can do to reduce redundancies without giving up important members of your organization.
Employee sabbaticals
While sabbaticals are traditionally considered a way to give professors time off teaching to follow other passions, such as research and writing, they can also be incorporated into other jobs to reduce costs. Basically, when an employee is on a sabbatical, they no longer need to fulfill their work obligations and can take time off for other pursuits, like furthering their education or skill development.
There can be two kinds of sabbatical leave— paid and unpaid. The paid sabbaticals need not necessarily mean that the employee would get their full salary. Instead, it could include a small percentage of the salary or other benefits, like health insurance coverage, that a workplace typically provides. There are several advantages of offering a sabbatical. For the employees, it provides them with a way to take time for personal and professional development while still having a job to return to. Employers benefit from this as they can cut down on redundancies and retain talented employees and prevent the consequences of employee burnout.
Job shares
Another way to go about reducing costs is to divide a full-time job between two employees. These sorts of arrangements typically give the responsibility of completing a task to the two employees sharing a particular job instead of a supervisor. For instance, say you are running a software company. Two employees working on a code would make it better than one as it would reduce errors and get work done faster. There are multiple benefits of using this system for all parties involved—
- The employer gets to retain valuable staff
- Since there is more than one employee working on a task, they can fill in for each other whenever one has to take time off
- The two employees can use their combined knowledge when performing tasks, ensuring higher work quality
- Unlike a standard part-time job, job shares involve the splitting of a full-time job between two employees and thus can also involve the splitting of employee benefits between the two.
Eliminate overtime
Employees might find working overtime an easy way to earn a bit extra money, but this can put the company in a tough spot, particularly during times of financial hardship. While it varies from country to country, employees paid on an hourly basis in the U.S. are entitled to nothing less than one-half their regular rates of pay for any time they work past 40 hours a week. Simply put, if you work two hours after your standard 40-hour week when you earn US$10 an hour, you would be entitled to US$30 for it.
To avoid this turning into an additional expenditure for the company, you can stop overtime work altogether. Such a change in policy must be clearly communicated to the employees in advance. The employer must also carefully look at the employee contracts to check whether such unilateral changes are legally permissible.
Reduce salaries at the top and freeze bonuses
It is generally believed that reducing wages can adversely affect employee morale and thus, even during a recession, companies don’t end up reducing salaries and instead tend to lay off non-essential employees. But if push comes to shove, and you don’t want to lay off employees, as a startup founder, you should consider reducing your salary before you enforce a company-wide change. Your personal financial sacrifice can benefit you by ensuring employee loyalty in the long run. You can also cut down salaries by temporarily halting annual bonuses or pay raises. Naturally, you will need to inform the employees about such policies so that they can manage their expectations accordingly.
While the previous tips are related to cutting employee costs, our final tip is to focus on reducing costs from other places, so that your employees can stay unscathed by recession. For instance, many companies subscribe to a lot of different services—be it for marketing or project management. If you run a media company, like ours, you would require a lot of different visual aids—for presentations, videos and articles, to name a few. Subscribing to one single service (like Canva) that provides you with visual aids for all these can help you lower expenditure.
Make sure to carefully pick subscription plans so that you are getting the most out of your money. Hopefully, all of these tips help you sail through this recession and any other financial hardship your company may face over the years as smoothly as possible.
Also read:
- Tips to Prevent Employee Burnout at Workplace
- What Is “Shrinkflation” and Why Opting For It Isn’t Companies’ Only Choice
- How Much Should a Startup Founder Pay Themselves?
- Best Project Management Tools in the Market
Header image courtesy of Freepik
