Analyze salaries

If the organization’s downturn is short-term, senior leadership and upper management could accept temporary salary reductions until business improves. However, if the situation is more dire, leaders might consider an option such as cutting overhead with job sharing. Employee numbers then remain the same, but two positions become one and it is filled by two part-time employees to support a function or role. Furloughs for non-essential employees give employers time to consider if permanent layoffs are necessary. Of course, this requires an understanding of each performers contribution within the organization to determine overall impact and level of “necessity.”

Look at schedules

Permanent remote work could save on operating costs, such as leases and travel expenses, which gives more budgetary leeway to avoid layoffs. Another approach is implementing a four-day workweek to reduce hours and salaries by 20 percent. The added benefit to a shortened workweek is better employee work-life balance.

Scale Back Benefits

When finances are in a critical state, and leadership is looking to avoid layoffs, employers can scale benefits and perks for all employees. Temporarily pausing the 401(k) match, relying more on virtual business meetings instead of incurring travel expenses, and cutting employee bonuses can help ease the economic burden without letting people go. As with salary reductions, scaling back on benefits should begin with leadership before expanding to others.

Streamline Systems

When auditing the company, employers should also evaluate company processes and workflows for efficiency. It’s possible an employee could be more productive in a different role or a process may be found to be more laborious than necessary. Digital software is another alternative to help streamline systems. Employee feedback is another great resource to help identify gaps and streamline processes. A good practice is to have performers look for ways to make tasks within their role more efficient and productive.

Every decision has its costs. The most important thing employers can do is to be open and honest with employees, including transparency about the state of business. This communication style can increase employee buy-in during economic uncertainty and encourage employees to rally and be part of the resiliency of the organization.