Cut Wages & Replace with Low Cost Benefits

Some call it an economic downturn and others call it a recession. During times like this the first thing we look to do is to cut expenses. After all, we can control expenses much more than we can control revenue.

In service businesses wages and benefits are typically the expenses that we scrutinize first and foremost. It may be a necessary evil to cut these expenses but we must be careful not to accelerate a downward spiral in our businesses.

The downward spiral usually starts with cuts in wages and benefits. These cuts cause our employees to resent us. This resentment leads to poor quality service to our customers. Poor quality service leads to client defection. Client defection leads to further loss of revenue. Further loss of revenue leads to more cuts in wages and benefits. The cycle continues until we’re out of business.

If we have no choice but to cut wages and benefits we must find ways to temper the resentment of our employees. Successfully tempering employee resentment will prevent our businesses from falling victim to the downward spiral.

Listed below are low and no cost benefits that we can offer employees to minimize the resentment they may have when we’re forced to cut employee expenses.

Job Sharing - It’s better to have a partial job then no job at all. Having employees share jobs will allow you to keep more of your employees on the payroll at a lower overall cost.

Telecommuting - Employees will benefit by reducing commuting expenses such as train fares, bus fares, gas, replacement tires and other automobile maintenance costs.

Casual clothing - In addition to comfort employees can save on dry cleaning costs.

Cross training - Increasing the knowledge of employees when times are slow will pay off when things turn around. You will also have the benefit of keeping your employees busy yet still available when you need them.

Monthly parties - A monthly pizza or hero party will boost morale and not break the bank.

Listening - Make time to be a sounding board. The fear of losing one’s job inspires creative cost cutting conversations. During normal times employees often overlook inefficiencies and waste. When employees know your business has to cut expenses they will be more forthcoming with problems they see. Listening to your employees and implementing their ideas will boost morale and save you money.

I’m in no way saying these low and no cost benefits will solve all your problems, but your employees will recognize that you are thinking of them in these hard times. Thinking of them now will create goodwill that will be paid back many times over when the economy turns around.

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