With the ongoing coronavirus pandemic risking a drastic economic crisis, experts are advising businesses to take a more compassionate approach to cost-cutting rather than implementing broad-based wage cuts or freezes to ensure a quicker recovery. Although contract workers in many industries, notably those in the production sector, already are risking regular salaries as a result of the lockdown of factories and other commercial properties, many businesses are reportedly preparing pay cuts or at the very least a freeze on raises beginning every month.
The majority of companies were not designed to withstand the current economic environment, and many will not. Many that have should begin taking measures to plan for potential market downturns. Unfortunately, all of these budget cuts have an effect on employee wages. This isn't always the case: some businesses set aside funds for crisis management to ensure that workers' compensation is protected in these cases.
In this post, we will discuss a few strategies that firms may use to prevent pay cuts and layoffs as a result of the pandemic: -
1. Hold off on Promotions and Raises –
Avoid all promotions unless they are absolutely necessary for your company. If they are needed for organizational continuity, inform the promoted employee that their title and duties will change, but that they will not receive a pay raise until financial conditions improve. And to save immediate payroll expenses, put wage changes and significance raises on hold as well. Step ahead with any pay equity changes that have been considered crucial. For non-sales workers, suspend all bonus bonuses immediately. Explain to the workers that in order to save jobs, the company has to be as lean as possible, which means bonuses would have to be sacrificed.
2. Encourage Work from Home –
To stop layoffs, corporate executives must think outside the box when it comes to cutting costs. The cost of office space is also a huge expense for th firms. Allowing workers to work from home might be a great way for analytics companies to save money.
3. Pause Hiring New Employees –
One of the key ways to stop layoff and still sort out the finances in this COVID pandemic is by halting the recruiting process and placing a moratorium on the onboarding of new hires if already employed. For this reason, the companies should prioritize their business teams and strategically place their staff based on need, pausing recruitment for all roles that aren't urgent.
4. Reduce Working Hours –
Many workers need flexibility right now. Working parents are attempting to combine child care with job duties as schools and daycare facilities close. Others might have to care for elderly family members who are ill or at-risk. Provide workers with the option of working four days a week or part-time for the duration of the crisis, and change their salary accordingly. This allows an organization to save money on salaries while still having employees working.
5. In-House Upskilling –
During this crisis, upskilling has proven to be a vital way for businesses to prevent layoffs. Businesses have been disrupted as a result of the pandemic, and executives are searching for ways to reduce costs. However, the epidemic has also provided an impetus for businesses to move toward automation, which would necessitate the use of specialized skill sets from employees.