One of the companies I worked for before cartooning full-time was doing some reorganization. The endless rounds of layoffs had everyone jumpy.
After one round, management must have noticed, so we had a meeting in the break room where, after more explanations of the company’s health and a well rehearsed sigh we heard “you know, it’s never easy letting good employees go.” And then, to his fellow management in the back, “what a day, guys! Who wants to grab some drinks after work?”
While I hate the topic, I feel it is an important discussion for our small business owners. Our SBDC has a Human Resource specialty as part of its program efforts. If a small business owner has any questions concerning issues surrounding employees, employment and other HR related topics, feel free to contact our office. If we don't have the answer, we'll find it for you!
Source: http://scrantonsbdc.blogspot.com/2009/02/small-business-layoffs.html
Dear Dan: Our growing business added staff the past several years, but now we’re stretched. Still, I want to explore all cost-saving measures before resorting to layoffs. What are some options? - Layoff-Phobic
Dear Layoff-Phobic: According to the National Federation of Independent Business (NFIB), the nation’s largest small business organization, layoffs by small businesses have hit record levels. “The small business economy is weak everywhere,” says William Dunkelberg, NFIB’s chief economist.
Todd Stottlemyer, President and CEO of the NFIB, adds this grim finding: One in every four small business owners now feels this recession threatens their very ability to survive.
Small business owners, however, are traditionally reluctant to make layoffs their first cost-cutting move. While big companies expand and contract their workforce with relative frequency, small companies tend to view their investment in people with greater reverence. Conditions will at some point turn around, and it becomes more difficult and expensive to bring good people back later.
Under current conditions, small firms are seeking ways to cut worker costs without cutting them loose altogether. Some non-layoff strategies include these:
You could also consider voluntary exits, furloughs or temporary layoffs. With the right financial incentives, some employees may consider leaving voluntarily. Be sure to seek legal advice for this approach, however, to avoid discrimination lawsuits.
Cutting pay and bonuses is also tricky and should be approach carefully. There’s a reason most big companies opt for layoffs rather than general pay cuts - they prefer to push the problem out the door rather than damage the morale of an entire workforce.
Small businesses have the same problem, so if you can’t show employees the money, consider amping up your efforts to boost morale through recognition, free meals and other low-cost devices.
Some businesses that never considered such measures before are trying out telecommuting and a four-day work week. They save overhead costs while employees save on commuting costs.
But only certain jobs are a good fit for this strategy, notes Meredith Johnson, Chief People Officer at Gevity, a professional employer organization. “Jobs that are high on daily customer contact or require access to in-office reference materials won’t travel well,” she says. “But those that are heavy on computer work, require great concentration, and have clear objectives can be ideal.”
Before deciding, consider which of your employees would be a good fit. High performers with self-accountability will do best. Also consider the impact on yourself and others. Depending on your current style, you might now have to “manage by results” rather than the more traditional “manage by observation.”
Johnson suggests these guidelines for considering shortened workweeks and telecommuting:
Finally, don’t forget to ask your own people for their cost-cutting and efficiency-boosting suggestions. They are the ones who often see where waste and inefficiency occurs day-to-day in areas that you may not be aware of.
Source: http://whatworksforbusiness.wordpress.com/category/your-employees/
All businesses have ups and downs, and in today’s economy, some employers are faced with downsizing. We are working with many business owners facing this heart-wrenching decision now and we seeing the pain. Many times small businesses feel more like family than work. However, “This is going to hurt me as much as it hurts you” are hollow words to a staff member losing their job. No matter what you do or say, letting employees go is never easy. If you find yourself here, think of how you can prepare yourself and your staff for this situation.
For the staff member(s) being laid off:
- Break the news early and give them a chance to get their financial house in order and their job searches under way. Even if your company doesn’t have to comply with the federal Worker Adjustment and Retraining Notification Act, known as WARN (requires companies 100+ employees to give 60 days notice), take the high road and tell them as early as you can.
- Provide written documentation for all benefits that your business will offer.
- Be familiar with filing for unemployment insurance. Many people have never had to do this and anything you can do to help is important. Workers should go directly to www.workinginoregon.com and file their claim as soon as possible. Note they do not have to wait a week before applying. File for Unemployment Online is on the right side under “NOTICE”.
- Don’t promise to notify them of job openings unless you really intend to follow through.
- Refer them to the stae employment office job bank.
- Be prepared to handle requests for referrals and job verifications.
- Let the terminated employee know whom prospective employers should contact.
Before you even get to this point:
- Review and familiarize yourself with all pertinent information in your company’s personnel policy or handbook.
- Consult your attorney or an employee-relations specialist who can advise you about sticky issues.
- Establish criteria that are neutral and nondiscriminatory for reducing staff. Avoid a lottery system or selecting employees based on age or other criteria that might be viewed as discriminatory.
- Once the standards are established, apply them equally and make no exceptions.
- Make sure personnel files and performance reviews are up to date and contain any documentation that supports your decision about whom to lay off and whom to keep.
- Consider the expenses your company will incur as the result of a layoff, including severance and insurance costs. Worker’s Compensation works like any insurance model. If you have had many claims - chances are your rates may go up.
After the layoff(s):
- Tell the remaining employees the reasons for the layoff.
- Convey your regrets about the situation.
- Encourage employees to ask questions, and do what you can to help them through the transition.
- Avoid discussions of why one person was retained over another.
If a layoff is an economic necessity for your company, remember that it is only temporary. A little caring and sensitivity now will pay off down the road when you are hiring again.
Jimmie Wilkins is the director of the Chemeketa Small Business Development Center.
