By Clyde A. Lettsome Phd., P.E.
In tough economic times, tough decisions must be made. Probably the toughest decision for most entrepreneurs and managers is related to personnel, their employment, and their compensation. If you need to make employment and compensation decisions, there is one thing you should understand: Money isn’t everything. No one wants to get laid off, but they all know that a few of them will be. Before you rush to do so, consider this: employees want to be treated with respect, maintain dignity, and be appreciated. They want you to be considerate, and they want you to show leadership when you take action. When making personnel decisions, consider the following:
• Layoff Low Performers and Disruptors– Show employees who work hard and fit the company culture respect. Remove the low performers and any disruptors. Show no favoritism to persons you socialize with on occasion outside of work.
• Cut Hours – Allow employees that remain to maintain their dignity. If they are the head of their household, the loss of a job can be emasculating. So, if sales are down, reduce hours before reducing people further.
• Freeze Salaries And Swap Benefits - Show your appreciation even when you have to take something away. Start by reducing retirement matches and bonuses. Then work your way towards further reducing salaries and, finally, reducing healthcare compensation. Also, consider cheaper benefits to make up for the loss of income. Examples:
o Flex hours
o Work at home
o Free snacks and beverages
• Rehire As Contractors – Be considerate and use laid-off workers as contractors when you need temporary skilled help.
• Offer Internships to College Students – To keep more money internal, consider hiring college students for low skilled work. Many of them will opt to work for cheap or free in return for experience.
• Be A Leader – Demonstrate that you are making sacrifices also. This may mean you take a pay cut or even don’t get a salary at all.
You will gain the respect of your employees even though you may have had to slash jobs if you take the steps above and consider more than money when you act. If you do not, when time gets better, you will find your employees leaving not because of money but because of the treatment, and this could cost you more long term.
Check your balance, review recent transactions and pay your bill on the go.
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