This is a period of serious economic despair.
Large companies are losing their market value, revenues are taking a downward plunge and huge losses are being incurred.
As a result companies have to take extreme measures to sustain the heat.
They lay off people, shut down departments/offices, minimize budgets and make many more such harsh sacrifices.
Laying off workforce must be the hardest decision any company has to take.
Therefore, companies try hard to find alternate measures that can save them substantial amount of expenditure and avoid the extreme step of laying off employees.
Here are some of the common and effective methods that the companies are employing to this effect.
Stop hiring new employees The very first obvious step would be to stop hiring new employees.
This wouldn't require a spark to comprehend that when you are not able to afford even the existing people, there is now way at all you can hire new ones.
One scenario where companies will still be hiring is when they are replacing their existing low performing employees with new, more qualified and capable prospects.
With lots of jobs being lost and even talented people left jobless, companies definitely get a chance to improve the quality of their workforce by getting to choose the best ones.
This will help the companies in the long run.
Limiting work hours Employees definitely prefer working for lesser hours and being paid accordingly instead of being rendered jobless completely.
Therefore, companies are reducing the work hours from 40-45 hours per week to 30-35 hours per week or even less.
Employees who are not dependent on just the salaries on month-by-month basis are going to accept this policy happily.
Offering flexible scheduling Along with reducing work hours, companies also give choices to the employees of working schedule with some minimum compulsory requirements.
This avoids the perception of something being imposed upon the employees and gives them some sense of respite as well.
Employees will appreciate the companies' consideration of their freedom and will stay motivated.
Controlling office expenditure This may seem to be a very superficial and limited measure, but practically speaking, limiting expenditure office expenses like stationery, small operational expenses etc.
can substantially cut costs especially in large organizations.
Cutting on Executive-level salaries and bonuses Small cuttings in the paychecks of highest paid people in the companies can help in saving hundreds of lesser paid jobs.
Many companies are following this trend.
Salary cuts of CEO's, co-CEO's and senior management helps companies save a lot of money.
It helps them assure the employees that the work force is not the only section of the company that is affected and they share collective responsibility in company's well being.
Partial salary cuts Salary cuts may be termed as harsh measures but comparing it with alternative measure of firing employees and considering the earlier mentioned measure of cutting executives' and higher management's pays, this may not actually be that much harsh.
Every employee can share the burden by letting the salary reduce to some extent thereby saving many jobs in the company.
Reducing travel costs Companies that have geographically distributed offices and operation centers will be able to reduce expenditure substantially if they plan employees travels and meetings carefully.
Companies should avoid every possible travel for work or meeting.
Even specific departments such as sales and marketing that require lot of travelling can cut on costs.
Alternative communication modes such as telecommunications and video conferencing can be used keep the work going without incurring substantial costs.
Unpaid Vacations/Compulsory Holidays Temporary holidays can be provided to the client wherein the employees may only be paid a percentage of their actual salary but will have the security of job.
They will be able to come back and easily start working again after sometime thereby allowing companies to cut pay expenditure without firing employees Work from home Allowing employees to work from home whenever possible and utilize telecommunication when required can substantially reduce operational costs.
Daily required expenditure of in-office food, electricity and maintenance can be avoided through this measure.
Whenever and wherever the presence of employees in office is not imperative, allowing people to work from home should be a part of cost-cutting strategies.
Reducing corporate activities like parties, recreational tours and internal promotional activities.
All the companies organize internal as well as external activities such as corporate events, parties that can be avoided during hard times.
Internal activities such as team building exercise, team tours, competitions and recreational activities which are organized to boost employees' morale may be reduced or eliminated temporarily.
These are some really effective and acceptable measure which can be employed by companies to reduce their spending substantially without resorting to the harsh and extreme step of firing its employees.
This will also keep the employees satisfied and motivated.