Business
6 Ways to Cut Employee Costs Without Cutting Morale
The New Year is just around the corner, and although the economy has picked up, there’s still no huge boost in job numbers around the country. As always, many businesses will be looking at how they can cut costs, but this can frequently have negative impact on an entire company – large or small.
Thus, you as a business owner or senior manager, may find that your profits go up, but productivity of your employees takes a nosedive, which bodes badly for the future.
Given this challenge, here are 6 ways to cut costs without denting employee morale.
It’s very important to be thoroughly communicative with employees: What’s going on; what’s in place to resolve any issues; what can be expected in future. After all, employees tend to respond better to bad news if they are provided with all the information available with respect to why job cuts are deemed necessary.
In essence, communication at work is about providing a purpose. Is it necessary to make cuts in order to survive, or are the cuts taking place to become more efficient, which in turn will allow the company more stability, which should lead to a brighter future?
Choice of words is very important here, and emphasis should be made on a positive future.
- Transparency
It’s a frequency that employees assume the worst about the owner or senior management of a company. When cutting costs, employees will gravitate towards the concept that it’s because the “hierarchy” wish to line their own pockets.
Should the future of the company be at stake, with transparency comes loyalty. It comes down to business owners and senior management demonstrating foolproof integrity and doing the right things for appropriate reasons. You can’t expect employee restraint without being entirely open with them.
- Invite Ideas
There are times when employers will overlook the most valuable asset when cutting business costs. And that asset is the employees. There are countless resources wasted daily on products and systems that don’t work and have a sizable impact in a negative way on the bottom line.
Who is it that has first-hand knowledge of this? The employees. They are fully aware of what’s wrong in a system and they are in the best position to alert management and business owners to areas of wastage.
Thus, through asking employees for their ideas about cost cutting, it can help to boost staff morale.
This will likely take some planning, and creating a channel for employees to put forward ideas is not necessarily an easy task. Nevertheless, if it’s done well, the benefits can prove to be enormous.
Some business owners and management will suggest that a monthly meeting occurs whereby ideas can be presented and then evaluated. Further, owners and senior management can post specific problem areas that employees can work on solving.
- Keep People On as Opposed to Laying Them Off
Most companies will rely on lay-offs in order to trim the cost on payroll. But it can be done the other way around. As an example: The business is going through tough times and there’s a risk of job cuts. Instead of job cuts, the owner invites employees to work for one hour extra each day. Given that the employees are fully aware of the current agenda, they’ll likely accept the scenario.
Another excellent way to offset cuts in payroll is to offer a bonus program which has a basis on profit sharing. Everyone must work together to reach the goal, after which, everyone shares in the reward. Thus, cooperation is high and job cuts are averted.
When a company is restructuring, praise and recognition when a job is done well is crucial. The provision of small gifts – a Starbucks voucher, iTunes gift card – helps employees to feel they are valued, irrespective they’ve witnessed some of their colleagues being laid-off.
- Sacrifice Recognition
Even when the workplace is depressed, employers must continually make the effort to provide recognition for the efforts of employees that continue on in a positive manner. Employees never forget how management have treated them when times are tough.
Thus, managers can listen to concerns, spend one-on-one time with employees, and thank them frequently.
Cutting costs in the workplace is never an easy thing to achieve, but the implementation of an online instrument for time management such as Clockspot is of benefit to all.
