Nevada HR outsourcing services firm, CBR, points out that layoffs could do more damage than good
In tough times, what corporate assets would you eliminate first?
A company’s most valuable asset is its people. However, the cost of employing them often makes up the biggest area of expense. The combination of salaries, benefits, taxes, bonds, Nevada health insurance, and workers compensation, is unquestionably costly. For that reason, in tough times, the first area of cutback considered is usually layoffs. Laying off experienced and skilled staff is to give away a company’s most valuable asset; clearly, alternatives need to be examined before taking that step in reducing the company’s overhead expenses.
Consider whether a layoff is the best first option
When companies are having great years, they will add bonuses, profit sharing, stock options and other ways of sharing the good times. Because of the way we learn to think, these perks often become expected; they become entitlements for the employees. They are not entitlements but perks when times are good. These are the first items to eliminate. Freeze and possibly reduce salaries and fringe benefits such as bonuses and profit sharing. Take a look at making tolerable cutbacks to senior executive salaries and benefits while you pass through the tough times. Responsible leadership should be willing to participate and endure temporary cutbacks of this nature.
Reduce staff appropriately
Some problematic staff or staff with marginal performance could be considered for layoffs but you are going to need some advice on whether you can pick and choose employees to go. One way might be to make selective, performance-based reviews and consider terminations based on those results. Have you reviewed your policy for dealing with problematic staff? Have those policies been followed? Do you have files to justify termination on problematic grounds? A great source of advice is a Nevada HR outsourcing services firm, such as CBR, which is staffed with HR professionals with long experience and a view to what others have made to work. These are your first steps before ever considering wholesale layoffs.
Reassignment for greater productivity is an option to explore
Consider reassigning personnel where skills can fit in other capacities. For example, staff members dedicated to payroll and benefits processing may better be able to use company time in accounts receivable or collections, while payroll and benefits administration gets outsourced to an HR outsourcing service. In almost all cases, such a firm can process payroll and benefits with less overhead than you can, and do it more quickly and more accurately—thus removing a large burden from a strapped company.
Outsource some of your overhead activities
Other things to consider, especially those where an outside source can help while you concentrate on the core of your business success is vendor relationships (including property oversight), tax handling and filing, such as is regularly needed for payroll.
Reduce your exposure to litigation
There are more state and federal laws concerning the proper way to conduct layoffs than you might have ever dreamed of. For HR outsourcing services such as CBR, these rules and regulations are part of our conscious, everyday thinking. Tap into that resource for knowledge and advice concerning the rules. For example, if an employer of more than 100 staff shuts down a site or lays off more than 50 people in a 30-day period, the employer will be required to provide a minimum of 60 days written notice prior to the layoffs.
Notification of governing regulators is also required. Unless you know exactly how to process those requirements, you are going to need some help. CBR is a great place to seek that help.
Other regulations that could inhibit your choices of who is to go first are the American Disabilities Act, Fair Employment and Housing Act, wrongful termination laws, wage and hours laws, state statutes on age discrimination, and federal laws governing the treatment of identified discrimination targets. Again, an HR outsourcing services company has a wealth of experience in these areas, even if you do not.
After exhausting all other methods, know what you are doing with layoffs
HR outsourcing services, such as CBR, can offer strategic and tactical guidance as you attempt to tighten your corporate belt. First and foremost, though, is the need to keep a proper perspective. Layoffs have a human side. A layoff is a degrading and humiliating experience for any employee of any age to go through. It affects many more people than just the targeted employee. In fact, the ripple effect runs in directions you may not realize.
Layoffs affect the remainder of employees left behind with immediate effects on morale and productivity. There are often lasting effects in those areas as well as in areas of loyalty and other staff relationships carefully cultivated over the years. It is absolutely necessary to show compassion and caring in all that you do surrounding layoffs. Never forget that, not only is it tough on the employee, you are also dispensing your greatest company asset back into the workforce and possibly even to your competitors. Having sensitive, caring, third-party friends in a firm such as CBR can be a valuable asset you will want to gain. For advice on how we can help you manage the tough times, give us a call at our toll-free number, (888) 700-8512, or in Nevada at (702) 533-4372. Let us review with you better alternatives to your company’s productivity and cost containment.
For more information about how a Nevada PEO can help you with your Human Resources, Nevada employee leasing and hiring processes, call us at 888-700-8512, request a proposal or contact us.
