In these tough times of 16-year-high unemployment rates, there’s a word that crops up all too often. I’m talking about the dirty “L word.” Layoffs are rampant, but there are other options. I recently learned Southwest Airlines has a policy of no layoffs, which I consider admirable – especially when you consider virtually all other airlines met the economic downturn with a round of layoffs. Nothing against the hardworking employees of Southwest, but you have to assume any company that massive has at least a few employees they could somehow manage to operate without. If you are anxiously considering a round of layoffs affecting dedicated workers who rely on you for support, here are a few alternatives.
Pay cuts. Even a small percentage pay cut across the board can add up to significant savings for a company. Consider larger pay cuts for management. Percentage pay cuts keep everyone in the same boat, and hopefully employees will take the attitude that making 95 percent of their current earnings is better than zero percent.
No matching of 401(k) plans. Employees might need the option of pulling that small, periodic contribution from their check to help pay for gas and groceries. But explain 401(k) contributions are pre-tax, so they’ll pay taxes on that extra income.
A 4-day work week. Think of the operating costs you’ll save if your equipment and facilities are idle for a day. If you’re the owner, all you need is one burning light bulb and one computer – get caught up on paperwork and maintenance.
A week (or two) of unpaid vacation. Rotate employees so you can keep operating. Suggest they use this time to spend with their spouses, kids or other family members, go visit an old friend or distant relative, go camping, or work on that “honey-do” list.
Reallocate your workers. Check with your suppliers and clients and ask if you can loan them some employees until things improve. Or look for some completely different venue where you can put good employees to work and turn a profit. I know one landscaper who performs landscape maintenance 10 months out of the year, but during January and February he finds a fixer-upper apartment complex and his employees renovate it. One foreman receives the added benefit of living there rent-free to keep an eye on things.
While the cynic in me believes establishing an absolute no layoff policy can only set you up to be the little boy who cried wolf if you’re ever on the verge of bankruptcy, a last-resort layoff policy will hopefully instill a sense of loyalty among employees.