5 Ways To Avoid Laying Off Staff

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When times get tough, it can often be necessary to make big cutbacks in business. Laying off staff is often an effective way of cutting back - but it means taking away people’s livelihood, which no employer wants to be responsible for. Many business owners will try to make cutbacks elsewhere first. But what if you’d exhausted all other options? Below are just 5 ways in which you may be able to avoid making staff redundant. 

Freeze hiring

If you’re already contemplating laying off staff, then there’s no way you can afford to take on new employees. Freezing the hiring process should be the first step. If you own a large company with a large turnover of staff, you may find that some employees choose to leave of their own accord - if you’re not hiring new employees to replace them, you’ll find that your workforce naturally shrinks without you having to lay anyone off. 

Suspend employee benefit programs

The next thing to consider could be to suspend employee benefit programs. Employees may not like having these privileges taken away, but it’s preferable to reducing their wages or making them redundant and will help you to cut back on employee-related expenses. When choosing benefits to suspend, consider the likes of bonus programs, paid lunches or travel expense reimbursements. Avoid stripping away benefits like health insurance, which your employees still need. 

Temporarily cut employee hours

Cutting employee hours is preferable to laying employees off. In situations such as the current pandemic, employees are likely to be understanding and will appreciate that they still have their job. Law in some states may allow staff who have had their hours cut to apply for unemployment benefits - this could help to top up their income so that they’re still receiving the same amount they usually would. 

Consider furloughing staff

Furloughing staff is a way of temporarily letting go of staff. This allows employees to take a long period of absence while your business recovers - they are eligible for unemployment insurance during this period so that you don’t have to pay them. Furloughing has become very popular during the pandemic, because it allows businesses to cut back on the cost of employees without physically letting them go. Some businesses have taken a part-furlough approach which may involve still hiring employees for a few hours per week. Because it can be quite complicated to keep track of furlough schemes, it may be worth using software such as this one found at unemploymenttracker.com. Using such a program, you can more easily make unemployment insurance claims for your staff, while adhering to the individual laws of your state. 

Explore loans and grants

Throughout Covid-19, federal and state authorities have been offering various grants and loans to businesses to help them stay afloat. Using this financial support, it may be possible to avoid laying employees off. You can also try loans from private lenders, however you should bear in mind that you’ll have to pay back these debts with interest - which could be more financial pressure in the long run.