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As crisis begins to hit harder and harder, many companies resort to company-wide layoffs as a number one survival strategy. And no one is spared: giants like Netflix, 7-Eleven, Ford, and Peloton, among others, let go of a significant chunk of their workforce in the past year — tech and corporate included.

Although layoffs are the fastest way to make up for the loss, there are other excellent cost-cutting strategies to try out, and maybe even avoid layoffs altogether! 

Try these six strategies for keeping your business afloat together with your employees — so you become a success story in times of hardship.

Cut Back on “Nice-To-Haves”, Invest in Employees Instead

In an attempt to strengthen employee engagement, companies provide staff and potential hires with plenty of perks. 

Various membership cards, access to different valuable resources and exclusive events, lavish team buildings, and even office food and beverages. In the cold light of a recession, all of these contribute to non-essential company spending. These “nice-to-haves” are the first thing to let go of when cutting costs. Instead, this money can be used to invest in customer retention (especially for enterprise-level clients) and your workforce. 

Although perks are attractive in regular conditions, job safety is a much better offer. A company that stands behind its values (such as healthy company culture and employee wellbeing) leaves a better impact. Many business owners claim that “people are the most valuable asset of a business”, and this is the opportunity to prove it. 

Your staff will value your dedication and help the business persist. When their success is aligned with the company’s success, everybody’s best interest is for the business to keep thriving.

Pick a Smaller Office, or Go Fully Remote

Office upkeep and maintenance costs are expensive, and prices in cities have skyrocketed the most. Choosing a smaller office or HQ away from the city center will help your budget — but there’s an even better solution: to switch to remote work completely.

Successful businesses have already implemented this solution and reaped the many benefits of having a remote workforce. Even having hybrid workplaces (optional to show up on the premises) lower operational costs. 

On the other hand, remote employees report that they’re happier working from home. It is more comfortable, and accessible, alleviates stress, and improves work-life balance, not to mention avoiding rush hours and traffic jams.

If you’re worried about productivity levels dropping when people stop coming to the office, we’re glad to inform you that the opposite is true! Several reputable studies have shown that productivity increases by about 13% when you allow people to work from home. 

Use Employee Monitoring Software for Remote Workforce

Employee system monitoring will help you keep track of staff from the distance. 

This is a great solution for businesses hiring remote workers, wherever they work from. Work-from-home monitoring software enables you to see:

  • When people clock in and out of work
  • How many hours they’ve worked
  • Which apps, websites, and tools they’ve used
  • Company productivity data
  • How much time do specific projects take up and how difficult they are to complete.

This will erase any doubt you have about your workers' capabilities and productivity — and help cut back costs even more.

By using an employee work tracking system to look into the tools and apps they use for work, you can detect which ones are the least used and cancel unnecessary subscriptions.

Employee monitoring facilitates better time and resource management, too. You can record the exact time hourly workers have spent working on their tasks, and pay them accordingly.

Finally, this service helps to erase the need for physical headquarters by keeping staff in line wherever they work.

Restrategize: Consolidate and Work on Customer Retention

People speak of halted growth as the worst thing that can happen to a company but repeatedly fail to consider that growth means liability. Expanding to new markets and hunting for more demanding clients demands hard work and investments. If you’re considering massive layoffs, don’t grow at all costs, but shift your focus to consolidating the basis of your business and only keep the most reasonable and safe growth targets.

Easing off on growing fast is a savvy consolidation strategy that keeps people from burning out, and companies from burning away. This article explains why successful companies cut back on growth from time to time — here are the main takeaways:

  • The law of large numbers suggests that the bigger the company is, the more expensive and demanding growth is
  • Mature and saturated markets don’t allow much space for growth
  • Not growing is a self-preservation tactic, a tendency to focus on core business instead of exploring other options.

Customer retention is a pillar that makes every successful business stable.

People are reluctant to switch to another service provider, even if their services are mediocre. But if you put a bit more effort into keeping people on board, you’ll retain your most secure profit source. Existing customers make more frequent purchases, spend more than any other customer profile, and are likely to recommend you if they’re happy with your service.

Here are some proven customer retention tactics to apply:

  • Create an excellent training program — The less they need to contact customer support, the better. 
  • Personalized customer support outreach — Don’t be afraid to reach out first, even if they’re quiet, with something like this:

“Hello, This is (rep’s name) from (company name). I just wanted to check in and see if everything is working smoothly for you. Were there any issues with (previous problem) again?”

  • Offer customized plans and services — Going above and beyond for your faithful clients isn’t difficult when you know them well. Use your knowledge to reach out with bespoke plans that work for them better than any competitor would.

Pause the Hiring Process and Optimize Employee Roles

Hiring costs are not to be disregarded. Even with successful hiring, there are onboarding costs and new salaries, contributing to substantial expenses you should avoid for some time.

If there’s no way an issue can be handled internally, hire project-based freelancers or independent contractors. You can find plenty of skilled professionals on LinkedIn, Fiverr, and Upwork.

Many articles suggest expanding employee roles to compensate for new roles, but this might not be the optimal approach. 

If you intend to add new tasks to already overworked employees, be very careful how you go about it. Add too much, and this could lead to disaffection and resignation. 

If deemed the only way, fair way to expand an employee’s role would be to:

  1. Discuss it with staff first. There’s no point in forcing it if people don’t feel ready to take on even more work.
  2. Have something to offer in return. A salary increase is more than welcome, and cheaper than hiring new people, so you can allow a generous raise as an incentive.
  3. Introduce new tasks slowly. Allow staff to adapt to new roles comfortably.
  4. Make it temporary. Be clear about how long they will need to work more.

We suggest you go the safer route and optimize employee roles instead. 

Workforce optimization is all about looking at what needs to be done in accordance with a new strategy and eliminating non-essential tasks. For example, if you redirect your efforts and resources toward customer retention, you may be able to scale back some marketing tasks.

The changes to employee roles can be temporary, as their schedules will adapt to current company needs. Team leaders can help you by recommending specific employees for specific tasks — knowing their skills and temperament the best.

Reduce Working Hours

Introducing 4-day workweeks or shorter shifts is a better option than terminating staff members completely. Reducing working days and hours weakens the blow on your budget, and keeps everybody on the payroll.

You will need to transparently communicate why and how you intend to reduce working hours. Notify everyone in your organization, and make sure to accommodate different needs and requests as much as possible. 

Again, employee monitoring tools can help you organize the shifts, so there are enough people on the job at each moment: staff monitoring services show who’s active at all times, and what they’re working on.

Final Notes

Layoffs are an instant cost-cutting measure. But they’re not the only way to cut back your costs. If you want to minimize your overheads and do everything in your power to avoid layoffs,  try to allocate your resources better by:

  1. Cutting back on office perks and investing in salaries and customer retention
  2. Choosing a smaller and cheaper office, or transitioning to remote/ hybrid altogether
  3. Use employee monitoring services to keep people productive and curb unnecessary spending even further (unused work software/ apps, hourly wages)
  4. Pause your growth strategy and work on strengthening the relationship with existing customers
  5. Hold off hiring new employees and work with what you have
  6. Reduce working hours and adjust new shifts accordingly

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