Tag Archives: Layoff

When Your Company Can’t Get Any Leaner!

Has your company’s overhead suddenly become a problem? Have your sales declined so much that your current cost structure simply isn’t sustainable? More importantly, have you decided to reduce costs, but are unsure of how to proceed, or where to focus your efforts? Well, you’re not alone. In what many economists now call the “Great Recession,” companies everywhere are scrambling to reduce expenditures. It’s a reality of today’s business environment; companies must reduce costs or suffer the consequences. It really is that simple. However, what can companies do when they’ve exhausted all options? What can they do when they simply can’t squeeze anymore? In a world where enterprises are touting the benefits of being lean, what can companies do when they just can’t get any leaner?

Should We Use Layoffs or Reduce Salaries?

Given this most recent recession, most companies have done their best to reduce expenses. However, at some point, these companies face the ultimate decision: should they pursue layoffs, reduce salaries, or both? Unfortunately, there really isn’t a definitive answer as to which strategy is best. Some argue that companies should focus on making deep cuts to their workforce, deep enough that they can immediately return to profitability. Others argue that companies should instead focus on across the board salary cuts. Yet, others claim that a combination of layoffs and salary cuts works best. Unfortunately, all of these actions inevitably lead to a substantial decrease in service capabilities. So what can companies do when they must reduce costs but are reluctant to go with these aforementioned options?

•             Outsource Payroll

Today’s companies save a tremendous amount of money by outsourcing their payroll to corporate payroll services firms. For instance, UK employers must meet stringent PAYE requirements. In Canada, there are a different set of rules pertaining to the Canada Revenue Agency, and how employers should be compliant when withholding taxes. In the United States, it’s the IRS. Each agency has a different set of rules governing how employees are paid. Each has a different set of rules on how corporations pay taxes. Finally, each has different criteria concerning withholding amounts. It can become a recipe for disaster. However, it’s less of a concern when using an outside payroll firm. In addition, outsourcing can save a considerable amount of capital.

•             Work Share Models

Most countries have provisions that allow employers to benefit from work share models. Employees work a reduced number of days. On those days where the employee doesn’t work, he or she receives unemployment insurance. The company is able to reduce its costs, while employees are able to retain their jobs. Work share models allow companies to retain high value employees without fear or concern that those employees will leave. This practice is often welcomed by both employer and employee. The impact in lost revenue is often made up by the unemployment benefits the employee receives. Work share programs are also ideal for companies who operate in cyclical and seasonal markets. These programs allow companies to match their workforce levels to their market’s business volumes. Meanwhile, employees are confident that their workload will increase once the market rebounds.

This recession has certainly taken its toll. Companies are understandably apprehensive about the future. As such, they have downgraded their forecasts and have adjusted expectations to coincide with this new reality. Outsourcing payroll management is one option that reduces costs without resorting to salary reductions and layoffs. Work share programs are also a proactive means of reducing costs. Both are solid options for today’s enterprises.

This guest post was written by independent journalist Patrica H. Hugley who frequently blogs about company finances and payroll services.


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A Downsizing Business Should Prepare for the Future

The economy is affecting businesses in many different ways. There are businesses that are struggling to survive. They have to find ways to cut their expenses and to tighten their belts because of a reduction in the amount of business that they are generating.

There are other businesses that are thriving because they are able to help the companies that are struggling. They are able to help them to lower their expenses and allow them to deal with the downturn of the economy. If a company needs to cut expenses one of the things they will do is downsize. They will reduce the number of employees they have and also reduce the amount of space they occupy for their business.

If a business can move to a smaller office they might find that they will spend less for it and thus be able to protect their bottom line and continue to operate. It is a common cost-cutting move and can be a very good strategy during a slower economic time. When a company does downsize due to the tough economy, they should also come up with a plan for when the economy recovers and when they will be able to expand again. This is where they can use the help of other companies that can offer a variety of services that will help them accomplish this.

Using a company that specializes in moving office supplies and personnel can help a business prepare for later. If it is done in an efficient manner it will be easier to grow at a later time. The use of storage facilities might be an inexpensive way for a business to keep the equipment that they are currently not using, but will use later.

It is a good idea for a company that is downsizing to use commercial removal companies that will do the job in the way that is needed. It might be an extra expense for a business to do this. It might not seem to make sense that a company will save money by spending money, but that has worked in the past and will work again. When a job is done well it means that when something is needed in the future it will be found easily and without delay.

Mistakes can be avoided when a professional company is used and it is the mistakes that can be the most costly. If a company wants to survive they must think about what they are doing in the present, but they must also plan for the future. If they do not, then their future will never occur.

Mark Gregory is writing on behalf of Capital Office Relocations, who are experts in office removal and storage. They offer Fulham Storage and Harrow Removals


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