Managing a small business can be a rewarding experience, but sometimes you'll have to make tough decisions. A change in the economy could swing your company into uncharted territories. It can make you wonder if it's time to lay people off to keep the lights on.
Before you start letting people go, read about these 10 ways your company can save money without layoffs. There's always something else you can do before making the painful and permanent decision to downsize your staff, especially during a crisis:
1. Freeze Annual Bonuses
Bonuses have become an expected part of the workplace, but you don't have to give them out if your small business is struggling. Reassure your team members that even though you have to freeze their bonuses, they'll return when it's financially possible.
2. Pause Additional Hiring
Forgoing the costs of hiring and training new employees could help save your business. Pause hiring new employees temporarily to save time and money.
3. Delay Company-Wide Raises
Raises are also expected, especially from long-term employees. Delaying them will buy your business time. Start from the top down so the biggest cuts come from the people with less to lose than those who make very little per hour.
4. Start Shorter Work Weeks
Shutting down the office for one day a week and letting people work from home will reduce costs like your energy bill. According to research from Microsoft Japan, your employees will likely experience a 40% boost in productivity too.
5. Make your Fleet more Efficient
Businesses that operate out of vehicles, like home health offices or food trucks, can do a number of things to cut down on fleet costs. You can change fuel types, do preventative maintenance, and develop more efficient routes. It saves your business money and will likely save you time too.
6. Begin Working Online
If your employees work entirely from home, you can shut down your office space completely. It'll save your company big bucks and reduce your total overhead because everyone already has a place to work.
7. Pause Contracting Work
It's easier to rehire contractors or pause their work while times are tough. They may or may not wait to rejoin the team, but it's one way to save your full-time staff.
8. Cross-Train Your Employees
Whether you pause contractors or not, you can reduce the need for new hires by cross-training your current team. If everyone pulls double-duty, more work will get done without paying extra salaries in the meantime.
9. Eliminate Overtime Payments
Depending on if your business qualifies for the Fair Labor Standards Act (FLSA), you may be legally allowed to eliminate overtime payments for a set period. Most of the time, this won't work for large businesses, but small companies sometimes find that this is a preferable solution to firing people.
10. Get Employee Feedback
You know how to run your business, but your employees know the fine details of each department and job requirement. Get their feedback to discuss other ways to cut costs and make it easier to stay open.
Maintain Open Communication
Always maintain an open line of communication with your employees. They'll feel panicked as your business starts to struggle. Get their advice, keep them updated and treat them as equals so they know you have their best interests in mind moving forward.
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