Surviving in a Challenging Economy
Today’s business environment is extremely competitive. Business owners are trying to manage costs while worrying about how the challenging economy will affect their businesses.
To help ensure your own business survives in this economy, look at what types of measures you can put in place to control workforce costs or increase productivity. For example:
- Consider a Hiring Freeze When it comes to staffing, a hiring freeze may be necessary. It’s best to cut back on hiring instead of salary and benefits. At the same time, do what it takes to keep your high performers happy.
- Don’t Eliminate Training, Update It! Instead of cutting back on training, develop training for your employees that focuses on new strategies, techniques and/or skills.
- Emphasize Existing Benefits Remind employees to take advantage of employer-provided benefits such as financial counseling through the Employee Assistance Program, discount programs and tax savings plans such as Flexible Spending Accounts.
One thing most employers try to avoid is layoffs. If your business circumstances require a layoff, you will want to avoid legal claims for the downsizing. A well thought-out plan is critical, so make sure to do the following:
- Identify the business reason(s) for the layoff and consider alternatives such as salary reductions, reduction in work hours and benefit changes.
- Know and consider your workforce’s profile before a layoff. Discrimination claims resulting from layoffs are usually based on age, sex or race discrimination.
- Take into account the potential costs of the layoff. These include the cost of attorneys’ fees, unemployment claims, severance pay, diminished employee productivity due to poor morale, and possible litigation costs.
- Determine if the federal Worker Adjustment and Retraining Notification Act (WARN) applies. WARN requires employers, among other things, to give employees advance notice if the reduction in workforce constitutes a mass layoff. The notice must be given to all affected employees, the state government and the local government. WARN applies to business enterprises, including public entities and nonprofit corporations, which employ 100+ full-time employees or 100+ full- or part-time employees who, in the aggregate, work at least 4,000 hours per week, exclusive of overtime. (For more information, please click on the Avoiding Costly Wrongful Termination Claims article).
Protect Yourself and Your Employees
Another important cost-saving factor is to remember safety and security initiatives. An employee who is injured on the job can file a workers’ compensation claim, and while that employee is injured, he or she may not be able to be productive in their current position. Consider these tips to help reduce on-the-job accidents:
- Analyze the losses and focus on improving the safety measures you already have in place, and consider giving employees a “refresher course” on safety and security.
- Offer incentives and recognition for meeting safety goals. Fewer accidents mean higher productivity. Protect company assets by having the appropriate checks and balances in place.
An additional unexpected expense can occur if your employees are not classified correctly under the Fair Labor Standards Act. If employees are not paid correctly, they can initiate a lawsuit that can end up costing you thousands of dollars.
Oasis Can Help
Oasis has a team of trained HR professionals that help our PEO clients with cost-cutting, workforce adjustment and loss prevention. Contact us for assistance with these and other employment-related issues.