Posted on: Monday, 16 May 2016

During economic slowdown , or if the company has some difficulties in making the expected profit as it was planned, the first thing the CEOs and executives are thinking in the staff layoff and putting many jobs redundant, to reduce the payroll cost.

It is totally wrong, losing the experienced staff is much costly, as they forgot the time and cost to get these staff being oriented and trained on their jobs and got familiar with the company internal systems and regulations, it is tough situation because these terminated staff could be loyal and productive employees who have done nothing wrong; there may be no performance or behavior issues – they are being let go to reduce the company’s overall costs, Losing them will cause the increase in the turnover ratio which is one of the instability measurements of any organization, in the opposite of this option there are many other options much more better than the layoff option, that could be briefed in the following:

  1. Giving a long leave without pay, e.g. 3 to 6 months of course after checking with your lawyer and HR experts.

  2. To go with a legal agreement with the staff to reduce their salaries, always remember reducing the salaries is always better than losing their jobs, under one condition to increase the salaries once the situation got improved.  

  3. Assigning additional work of any resigned employee, to one of his beers, e.g. if sales person resigned, one of the other sales staff or marketing employees can do his job without additional salary, of course with mutual agreement to be in line with the law.

Such options for sure will be reducing the cost of the payroll, at the same time it will avoid many negative impacts on the business such as the negative impact on the other staff morale, and the reputation of the organization towards its customers, venders and partners, as well as its image in the market against its competitors.

Some other options to reduce the operation cost, the operation managers could also share in giving ideas of cost reduction, the other employees in the organization also could share in this project.       

Hence layoff is not the only option to face the business slowdown impacts, 


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