When payroll cuts become necessary, many companies face a drop in employee morale that can seriously damage operations. Key employees frequently become less productive and are more receptive to other job opportunities.
Here are some proven strategies that can help you make overhead cuts with- out damaging employee moral.
• Tell your employees how the cuts will actually strengthen the business. For example, explain that the money saved will be invested in new equipment and more advertising to make the company stronger. Never announce that people must be terminated because expenses are too high.
• Make your cutbacks equitable. Don’t create unnecessary resentment by keeping excessive top management perks.
• Use incentives to encourage voluntary resignations. Consider options such as early retirement packages. Or help employees set up their own businesses with you as their first customer. Custodial workers, graphic designers, and others can often provide their services as sub- contractors on an as-needed basis.
