Companies Get Creative to Avoid Layoffs

In this time of plant closings and layoffs in historic numbers, some companies are managing to cut costs without putting employees out of work. More and more employers are coming up with creative ways to save their workforce from the growing number of unemployed.

Some of the ways that companies are avoiding layoffs are time tested, common sense approaches to the age old problem of what to do with your employees when production slows or even stops. Four-day workweeks, unpaid vacations, voluntary or enforced furloughs, wage freezes, pension cuts, and flexible work schedules are just some of the alternatives to massive layoffs.

Other companies are asking their employee’s to take voluntary pay cuts in the hopes that this may save a few jobs if layoffs become inevitable. In the past two months there has been a dramatic growth in the practice of these policies. The deepening recession is changing the way we live our lives and the way we conduct business. While the global economy continues to change, we must remain flexible and change with it. Holding on to rigid standards may spell disaster for many businesses.

The New York Times reported Monday that many large companies are changing the way they do business. For example, Dell Computers are implementing extended unpaid holidays, Cisco has announced a four-day-year-end-shutdown, and Motorola is considering salary cuts. Other businesses, like Nevada Casinos have gone to a four-day workweek, and car-maker Honda is beginning voluntary unpaid vacations for many employees. These tactics are also becoming popular for many small and mid-sized businesses.

Although companies like those mentioned above are doing their part to help the revival of the sluggish US economy, layoffs are more evident than they have been in many years. However, thanks to these creative business tactics, the number of companies who say they plan to layoff employees over the next year has dropped from 26 percent to 23 percent.

These tough-times tactics are not only good for the employees, but the employer as well. Sparing jobs increases long-term loyalty among workers and it also saves the employer money in re-hiring and re-training costs. Companies that choose to cut costs now by laying off employees will pay the price when it comes time to restore their workforce.

More and more companies are following the trend of creative cost cuts, like mandatory holiday shutdowns, salary freezes, four-day workweeks, and reduction of contributions to retirement and health care plans.


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