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Layoffs are perhaps the most painful experience for businesses, managers, and all employees, not just those who lose their jobs. Layoffs are often one of the first approaches to cost-cutting when employers are confronted with serious financial issues. In the face of escalating inflation, the possibility of a recession, and changing business conditions in the technology sector, more employers are turning to laying off staff to reduce costs.

Layoffs may address a short-term issue, but employers should also consider the longer-term impact. Remaining employees may become overburdened and disengaged, impacting productivity, customer relationships, and, ultimately, revenue. Valued employees may lose confidence in the health of the company, leading to turnover. Customers may also become concerned about the company’s viability and take their business elsewhere.

While layoffs might become necessary, here are some alternatives to help an employer weather a short-term storm.

• Check out state work-share programs that help employers retain workers at a reduced schedule while the employees receive a portion of their unemployment benefits based on the hours they do not work.

• Implement furloughs to temporarily cut payroll costs rather than laying people off. Furloughed employees remain on payroll on unpaid status for a specific period of time. They generally retain their benefits and may qualify for unemployment insurance.

• Reduce bonuses, perks, and expenses. These can be restored once the organization is back on a healthy footing.

• Implement pay cuts at the top of the company first, not for lower-wage employees who may be living paycheck to paycheck.

• Cut contractors. While this may add a burden to employees’ workloads, they remain employed.

• Freeze hiring. If there are important open positions, cross-train employees to take on the work for the short term.

Above all, be transparent with employees about the organization’s challenges and the actions taken. They may be more willing to step up if they have timely, accurate information about what is happening and what leadership is doing to address it. Employers Council’s human resources consultants and attorneys are available to walk you through alternatives to layoffs. We also have a whitepaper that can help with the layoff process if that becomes necessary. If you have any questions, please email the Employers Council Member Experience Team.