3 Ways to Reduce Overhead Without Laying Off Employees

3 Ways to Reduce Overhead Without Laying Off Employees
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COVID-19 has already had a major impact on companies of all sizes, and it’s impossible to predict when things will start returning to normal. In fact, almost one-fourth of all American small businesses are at risk of going under within the next several months.

In these uncertain times, businesses in virtually every field are looking for ways to cut costs in order to stay afloat. Unfortunately, layoffs are one of the most obvious ways to reduce overhead, especially for companies that are experiencing decreased demand. In this article, we’ll help you learn how to handle a business crisis while retaining as much of your staff as possible.

REDUCE SALARIES
Nobody wants to receive a pay cut, but this is often the most intuitive way to keep your business running. Instead of laying off 25% of your employees, you could look for ways to cut 25% of payroll expenses without letting anyone go.

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Keep in mind that a flat rate may not be the best way to approach this issue. A 25% reduction to a salary of $600 per week, for example, would cut that employee’s earnings to just $450. This would be significantly more challenging compared to transitioning from $4,000 to $3,000 per week.

ASK YOUR EMPLOYEES
Managers need to understand the big picture, but employees often know more about certain details. Depending on your company’s chain of command, there may be unnecessary expenses in your budget that could easily be reduced or even removed entirely.

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If your employees understand your situation, they’ll likely be willing to help you look for ways to cut costs. Looking for these opportunities is good for everyone—whenever possible, you should try to eliminate other expenses before laying employees off.

REDUCE BENEFITS
Common employee benefits include everything from health insurance and paid sick leave to retirement plans and 401(k) matching programs. While these can be incredibly effective when it comes to attracting and retaining employees, it may be better to cut some benefits before starting layoffs.

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Of course, you can’t always cancel benefits unilaterally. For example, employees may be entitled to certain perks as a result of their contracts. Furthermore, federal regulations may prevent you from making particular changes. Make sure to consider these implications before making any final decisions.

Millions of Americans have become unemployed as a result of the COVID-19 pandemic, and layoffs are an inevitability in some cases. That said, these ideas will help you delay and minimize layoffs in order to pay your staff for as long as possible.

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