Downsizing your business is a tough decision to make. It means that you need to cut costs – and the first ones to go are usually your skilled employees. Sometimes, it’s inevitable and the only way to save your company from tumbling downhill and disappearing into nothingness; other times, it’s not necessary to make those painful layoffs after all.
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Here is how you can save your company and take care of your most valuable resources at the same time, building trust and revenue while you’re at it.
The business owners who are quick to throw their employees under the bus when times are tough tend to forget that by saving money short-term, you could easily cost your business more in the long run. It’s not just the fact that you need to compensate for their skilled work somehow – it’s also the moral hit, the decrease in productivity, and lack of trust your employees will have in the management.
Be honest with them by explaining that times are tough and you’re looking for ways to increase your revenue. Make it clear, at the same time, that you’re doing everything you can to ensure their positions and that you’d rather get rid of other resources before you end your relationship with them. Check out thebalance.com for some other smart money-saving moves and present these options to your employees.
Ask them for advice, include them in the brainstorming, and implement the great ideas and tech tools you get from your team. It’s the kind of talk that builds trust.
The reason why business owners tend to cut out the last people they hired when downsizing is obvious; they’ve been there the shortest, and employee salary tend to cost companies quite a bit of money.
By cutting out the extras we are, however, not talking about asking your most recent additions to take their hats and leave; freeze the additional hiring, rather, cut out those bonuses, institute shorter work weeks, wait with equipment updates that are not pressing, and cut out unnecessary travel expenses.
If you have various processes to complete one task, make sure you’re able to squeeze this into one, cost-effective operation. An embedded system can encompass many of your small routine tasks and, by investing a bit in something decent, you can save a lot in the long run. Have a look at Izenda.com, first of all, and check out this article for the best systems in 2017.
That business owners choose to lay off a couple of newbies rather than getting rid of these extras is usually because it requires a bit less work – and they don’t have to deal with an amount of changes around the office. That’s good for them; not so much for the excited employee who just got a new job, on the other hand.
In times like these, you need to consider all of your options. Letting people go comes easy to some businesses, and it’s the first measure they take to ensure an uphill journey. It shouldn’t come easy at all, though, and as a business-owner, it’s your responsibility to keep both your company and your employees afloat.
CEO and Founder at Mighty Shouts.
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