Alternatives to Employee Layoffs

But when business turns south (62,000 jobs were lost last month), what alternatives are there?

Michigan-based Pro-Temp Inc. co-owner Cal Van Hemert started snipping away at expenses at the heating, cooling and refrigeration service company.

He replaced the company’s formal holiday dinner with a pizza lunch, restructured to get more people into the profitable sales department and is debating whether to trim benefits for his 14 employees.

Cross-training employees in multiple roles can add efficiency with no additional cost.

Employees might agree to sabbaticals, unpaid vacations, lowered salaries, even work furloughs.

415 Productions offered either an overall 5 percent pay cut, or a four-day work week reflecting the appropriate decrease in pay.

Charles Schwab Corp. guaranteed a $7,500 bonus for any affected employee who gets rehired within 18 months. In addition, company founder Charles Schwab and his wife created a $10 million educational fund for these workers. The fund will cover as much as $20,000 worth of tuition over two years at accredited academic institutions.

Your most important investment is in human capital. The cost of turnover is significant.

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