Business Strategies during Lay-offs
From the two creative solutions, I will talk about the second one. The second solution involves addressing the company’s financial decline by conducting an assessment of its financial position and determining ways to cut cost. The implementation of cost-cutting measures is essential in limiting the impact of the company’s financial decline on its performance. First of all, the company should assess its financial position. The company may use its balance sheet, cash flow statement, and other financial statements to identify aspects of activities and operations that increase spending. Next, the company should determine which activities or operations to limit to cut down cost (Schmitt, 2012). In this scenario, we are looking at lay-offs as a solution to cut down cost.
Prior to implementing lay-offs, the company must communicate directly with employees to discuss the present situation of the workplace. The owner and the managers must meet face to face with employees in a meeting to detail the company’s current situation and to inform them of the following steps that it would take (Reed and Bogardus, 2015). Furthermore, the company must be honest. Full disclosure must be observed to ensure that employees understand the repercussions of the company’s financial position. In this way, they know what to expect and would be able to prepare for the negative outcomes of the company’s decisions. Current employees, for instance, may begin looking for other jobs and preparing their transition to unemployment. This is a respectful way of implementing lay-offs. After meeting with employees, the management may now structure a lay-off plan. It is important to conduct a thorough assessment of the company’s current employees and job structure.
Conducting assessment is important in determining what jobs will remain relevant following the company’s transition to cost-cutting measures. The management should be able to determine which jobs would still remain relevant to the company’s day-to-day operations. Part of assessing the company’s needs in terms of employment also involves determining those who deserved to be retained in their respective positions. A lay-off scheme involves determining those in major senior positions or who have reached their tenure. These people must be retained. On the other hand, people who are less tenured or are relatively new or newly hired, then they should be included in the lay-offs or asked to cut back on their hours. In this way, they get to retain their jobs and look for other jobs that they can do in their free time. Apart from being fair when it comes to employee retention and in deciding which employees to retain or lay-off, the company must also structure severance packages. The management must balance the severance pay that employees need and the company’s capacity to provide for these packages considering its financial position. Companies have a structured system in determining severance packages.
Overall, these must be commensurate to the position and years of service of employees (Herrick, 2012). Finally, after completing the layoffs, the company needs to focus on taking care of its existing …