By Rachel Stone, Head Of People Management At Smith & Williamson
Many employers are searching for alternatives to redundancy that allow them to reduce staff costs while keeping the talent in their business. Here’s 10 ways you can save money without losing your people.
1. Robust performance management – now is the time to be very clear about your expectations and to manage poor performers out of your business. It takes time to do it properly and fairly, but reassures other staff that you are not allowing anyone to jeopardise the business’s chances of recovery.
2. Recruitment freeze – whether you opt for a complete freeze or simply tighten your approval process for new posts, a recruitment freeze will encourage you to re-train or multi-skill existing staff.
3. Targeted pay increases – many companies are looking at reducing overall cost of living increases and focusing a limited pay budget on those who are making the most impact on business results.
4. Overtime ban - unless you have a strict approval policy for overtime it can be easy for additional costs to mount up, with overtime becoming a matter of course rather than a response to business pressures. Asking staff to forego paid overtime (providing there is no contractual entitlement) may make sense, particularly if the volume of work has decreased.
5. Job sharing – faced with the possibility of redundancy, some staff will be interested in the potential for job share. For you it has the advantage of flexibility, reduced cost and keeping skill and experience available for the future.
6. Review training methods and costs - training doesn’t have to mean expensive courses or qualifications. On-the-job development, including work shadowing, coaching and self-directed learning (reading, internet research) can all play their part and keep your staff up to date.
7. Suspend holiday trading arrangements - Flexible benefits are great, but many businesses would not choose to be buying back ‘surplus’ holiday at the moment.
8. Reconsider training contract policy - reducing training places or ending a policy of automatic employment at the end of training contracts may be an option. But make sure you give careful consideration to the long-term impact on your supply of qualified staff.
9. Reduced hours - many high profile businesses have led the way, encouraging staff to reduce their hours on a temporary basis. For example, they could drop down to working four days a week, but also receive compensation of between 20% and 30% of the pay they would have normally earned on the fifth day.
10. Sabbaticals - offers of sabbatical breaks of between one month and a year are on offer in larger businesses, usually with a proportion of pay guaranteed throughout, together with a guaranteed return to work at the end. Great for those who can afford to live on far less than their usual monthly income, and for those with a yearning for the gap year they never had!
A word of warning: check employment contracts before you start to talk about any potential changes and do take advice before attempting to make changes to contractual terms.
Finally, how you treat staff in difficult times affects how they treat you as their employer when times improve. Good communication and a commitment to treat all staff with respect, whether or not they can stay in your business, will help you maintain staff loyalty and engagement for the future.
For help and advice on practical people issues, contact Rachel Stone, head of People Management at Smith & Williamson and her team on 0117 376 2066 or by email email@example.com.
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
Smith & Williamson Limited, Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International.
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