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Check out our weekly blog posts and see the latest news and discussions happening in the HR world of business.

Steps For Preventing Covid Related Layoffs

Just last week, Disney announced that it was laying off nearly a quarter of its staff, largely at its Florida and California-based theme parks, in response to the fall-out from the COVID-19 pandemic. In a statement, the company chair said that the company had kept “tens of thousands” of workers furloughed, with full health benefits, since the parks closed. However, with California still declining to allow parks to open, and restrictions in place limiting the number of guests at the company’s Florida theme parks, the company said it faced “continued uncertainty regarding the duration of the pandemic” and would need to trim its workforce. 

Of course, Disney isn’t the only company to have instituted mass layoffs, it’s merely the latest, with companies both big and small cutting back their workforce in a vain attempt to remain financially solvent for as long as possible. On paper, it might just make sense: After all, one of the biggest expenses for businesses is paying their employees! But when you think of all the work it took to hire these folks, how good they are in their roles, and even potentially your own sense of personal obligation to protect the folks that you have shared a work space with, is there any possible way to avoid handing them a pink slip? 

Read on below for our top six tips for avoiding pandemic-related layoffs: 

Cut hours: 
One of the easiest, and most effective ways, to trim your payroll budget is to reduce the number of hours for your workers. While it will not be optimal for some, in the face of potential layoffs, an incremental drop to a reduced-time or part-time schedule, as well as the virtual elimination of all overtime hours, can significantly boost your bottom line. As to how much you should cut, check first to see if your workers are unionized as any cut will have to first garner their approval and then maybe even poll your workers about what would be manageable for them. Some employees may welcome the chance for a lighter schedule in response to increased demands at home due to virtual schooling or increased caregiver roles. Worried that fewer hours in the office will tank productivity? Studies suggest it is quite the opposite, with one computer giant finding that workers were actually more productive when they worked a four-day workweek, versus the traditional five. 

Trim compensation: 
Again, this isn’t a decision that is likely to be met with open arms but will likely be viewed as better than the alternative. While you may find it tricky to trim hourly wages due to state and federal restrictions, you can take a whack at more discretionary spending such as bonuses, commissions, and other incentive payments, especially if it states in your compensation breakdown that these awards are discretionary and tied, in part, to company performance. We also caution that if you are going to institute salary reductions, that the drop in salary for an exempt employee can cause them to lose their exemption, although these rules are sometimes relaxed during economic downturns and times of hardship. Further, you’ll want to be mindful that you’re not dropping wages after they have been earned and that you are not making the decision on who takes a pay cut based on the quality or quantity of a person’s work. Rather, you could put workers in tiers based on how much they make and institute proportionate cuts at each level to keep things fair with the highest paid workers taking the biggest cuts and those on the bottom rung of the career ladder missing just a few percent. 

Encourage leave: 
If your business is treading water until the restrictions lift and there is not much work to be had, you can encourage your workers to take their paid time off. In this way, workers are using up their vacation so that when things do ramp up, they’ll be on hands on deck and you won’t have to worry about temporary staffing to see you through. Admittedly, the pay-off on this one is somewhat marginal, but it’s a good faith move for your employees and may also incrementally edge down your overhead spending due to less folks being in the office and using associated resources. A second option, meanwhile, is to allow salaried workers to take unpaid leave, almost like a sabbatical. Under this model, workers could take off one day per week or one week per month to help reduce overhead without worrying about job loss. 

Offer a package: 
The old saying goes that sometimes you have to spend money in order to make money, and this just might be the case when determining post-corona layoffs. If you have an old timer on your staff, chances are their tenure with the firm means that they are also among the highest paid. Therefore, you could save considerable dollars if you were able to encourage them to take an early retirement package. Sure, you’ll be laying out a little money up front, but the cost savings realized from eliminating that employee’s salary and perks could significantly lower overhead in the months and years ahead. This is particularly true if you don’t have to rehire for their position and can instead farm out a portion of their duties to existing members of staff. However, we do advise that you run it 


Reskill and reassign: 
If you have workers stuck in jobs that no longer serve a purpose in the post-pandemic landscape, consider moving them to areas where they might be more useful. Bear in mind, however, that these transfers may not be able to happen seamlessly and that some workers may need considerably more skills to perform their new duties effectively and be prepared to provide training as necessary to get them up to speed. 

Reexamine your hiring: 
Seems like an obvious one, but it bears noting: now is not the time to hire new faces! Even if you had folks in the pipeline before the pandemic hit, unless they are truly critical to the current day-to-day functioning of your business, you would be best served to put their candidacy, and even their offer, on hold until you have a clearer idea of what the post-Corona business world is going to look like. Further, you should reexamine the types of employees you have on your roster and see whether it would be possible to scale back your workforce to remove contractors, freelancers, and other temporary staff, particularly if you’re shuffling other employees around from areas of low need to those with more work. 

What have you done to stave off layoffs in your workplace? Let us know in the comments. And of course, if you would like to explore any of these job-saving strategies in more detail, give us a call at 609.860.0400 and we’d be happy to work together to develop a tailored strategy for your business. 

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