Every day I read about a company laying off employees because sales are lagging, profits are eroding and the company is losing money. The most commonly used option is to lay off employees. How many talented, well-trained people are laid off—particularly those who contribute to the leadership and sales excellence of the organization? Almost too many to count. If you own or run the company, you better know what it costs to train an employee and make them productive. It’s going to cost you just as much, if not more, when you begin to hire again and the folks you laid off are gone.
What’s a better strategy, you ask?
Restructure yourself to a business transformation. How? Ask everyone to take a pay cut. Sounds inconceivable right? Maybe not. No one wants to lose his or her job, and most savvy employees understand that thinking creatively during this economy—engaging in the principles of intrapraneurialism—is the key to long-term success. If you are paying them above the unemployment rate, they will probably stay. Perhaps a loyalty incentive can be part of the restructuring/ retention package. Look, professional sports teams do this every year.
The economy is not going to be ugly forever. As it begins to come back, your employees’ salaries will begin to increase. You keep talent, you avoid wasting money on future hiring and training efforts, and you build incredible loyalty…all while developing the leadership skills your company needs. And the icing on the cake? While you are fully ramped up, your competition is falling behind since they are stuck in hiring and training mode.
Take my advice: offer this form of restructure. You’ll be surprised at the outcome.