Sunday, November 9, 2008

Ask Employees for Help in Short-Term Cost Reductions

A member posed an interesting question in a meeting of Chief Executive Boards International. He was looking for ways to reduce costs for a period of six months or so of slow business, while retaining his employees for a future upturn.

Several ideas and suggestions were offered. A temporary across-the-board reduction of everyone's salary was not a favorite. A reduced work week, on the other hand, had some appeal. Asking "how would you decide whose hours to reduce, another member suggested "ask them". Ask for volunteers to go to, say, a 32-hour work week. You could sweeten that up by offering a Friday and the following Monday off, then leapfrogging a weekend and doing the same again.

A 24-hour work week would keep most employees still eligible for benefits (a detail worth checking if you're considering reduced work weeks), while substantially reducing costs on a temporary basis.
If you're looking for ways to temporarily reduce wage costs, go to your employees for ideas. If they know the company needs to cut costs and also knows the company would like to avoid layoffs or terminations, they may be willing to make some sacrifices of wages in return for time off.

If you have used other means of temporarily reducing costs in your company, please click on "Comment" below and share them with us.

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Terry Weaver

Chief Executive Boards International

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

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