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Layoff? Is there an Alternative? Assessing your position in a changing environment. How to pull through without losing it all.
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Last update: 25.11.17 last link check: 25.11.17
Layoff? Is there an Alternative?
Don't Dive When the Pool Is Empty.
We see the following types of comments every day now:
"There
is nothing in the economic tea leaves that suggest someone is
going to be hiring. This is a broad-based economic slump. From
pharma to industrial to housing to telecommunications, every
aspect of this economy is in a free-fall," said Richard Yamarone,
director of economic research for Argus Research in New York.
"There is no safe haven."
http://www.washingtonpost.com/wp-dyn/content/article/2009/01/26/AR2009012600497.html
HOWEVER,
There
are alternatives to dumping people, euphemistically called downsizing.
True, your product may not be in high demand as the world careens
toward economic doldrums with no ocean current and no wind to fill
the sails, but that does not mean that the crew must walk the plank to
lighten the vessel for whatever wind may come along. I am sure that
many companies are giving those who are being laid off, severance pay,
promises of rehiring, attempts to find alternative positions. But as
times get worse, such niceties are not going to be available - no money
for severance, no hopes for a turnaround in the near future, no jobs
out there to be had. But all too often, there are alternatives which
are just not attempted before the "best" solution in the short run and
the worst for the long, becomes the norm across the board. With a
number of the following, you can survive the downs without going out.
Spend some money for expertise to
find alternative approaches, attempt some social innovation,
expand in new directions rather than contracting, reduce
remuneration and time worked while providing a stable base for
continuing, find new uses for your products, rent or share space,
outsource at lower cost certain processes while going in new
directions, find new markets available in the declining economy,
basically save and support your talent. Below are some of the moves to
consider before becoming
just another of the casualties, or before adding to a cycle of the
unemployed and nonviable commercial entities in an ever worsening
downturn. We will come out of it. History has shown us that. The
question being, how can you best hold it together until it does, no
matter how long it takes?
Very
seldom can all of these things be accomplished by you. It needs to be
done by someone whose profession or outlook can provide the
unencumbered view to assess the true situation faced by the company.
Very often, the board is in panic and the view of the horizon is rather
limited when incomes start to fall, and obligations become due. In such
cases, you need someone who has nothing to lose but is known to be able
to see things from a fresh perspective relative to your particular
sector or situation. Many buggy whip manufactures went out of
business with the advent of the automobile. How did some survive as
companies, some of which are operating even today while presumably not
producing the old product?
ANALYZE YOUR SYSTEM
1. Find the hidden talent in your midst. Find
out what those surrounding you do best, or have talents not currently
utilized, and find other new niches in which to use this talent, go in
another direction, add on or improve what you are already doing.
2. Hire
someone to take a look at your system and find ways of cutting out the
unnecessary, do something cheaper while retaining quality,
redesign for efficiency, cut out unnecessary storage of parts or finished
product thereby reducing the space needed to operate and releasing rent, or taxes
paid on property. In general, wise contraction can pay very
large dividends.
3.
Look at what others are
doing who appear to be surviving. What is the secret? Is it only the
area of the economy they are in, or is it certain practices which has
allowed them to survive and perhaps even prosper while all around are
in collapse. Utilize the manpower you currently have to do the
research, ask the questions, do the testing which will be needed to
determine what and how it would benefit your particular situation.
4. Reduce
office space by figuring out how significant parts of the work can be
done at home through the computer and other communications systems.
2. If necessary, bring in someone who can effectively
harness the new approach. This does not have to engender a huge outlay
in terms of salary if trade off, on done on spec until a noticeable return, or
provide increases in remuneration based on specific benchmarks. Outside
investment or loans can be garnered.
ALTERNATIVE USES FOR YOUR PRODUCTS OR ALTERNATIVE MARKETS
1. Do a product analysis. There may be different uses for your product which
have not been previously utilized or perhaps even seen. Find
other uses for your product which through small changes in design
or production can generate additional value in a declining market. There may be a
ready market for a slightly altered product.
2.
Examine the market. There may be a demographic which is missing in your
current marketing which can be targeted with minimal advertising.
3. Find new markets for your present
product as the ecoonomy shifts. Stay abreast of the shifts taking place to
identify these new opportunities. As parts of the economy crumble,
other directions will be taken all of which will provide for new
opportunities. If you are down to the bone with your previous
system, you will be unable to take advantage of the new
opportunities, or to even recognize them when they appear.
4.
Hire someone to assess possible new markets in a deepening recession
for a product your setup can handle
5. Find other uses for your product, which through small changes in design or
production can generate additional value in a declining market.
OPEN UP NEW PRODUCTS, MARKETS
1. Identify
areas of the economy which will be needed no matter what, and can be
entered into at first in a small way with minimum retooling and retraining.
Any
population has a basic set of needs regardless of the lack of spending
and cutbacks. Can your company provide some of those needs?
2. Find
out what retraining groups, classes are available for whatever shift or
innovation in production which might take place. Much retraining
material is already on the web. It needs to be found and adapted to
your particular industry.
3. Identify new delivery systems which can provide cheaper access to current or new markets.
4.
Research the possibilities of new ways and materials for cheaper,
faster retooling. Paying someone to search for new and faster ways to
retool may be the wisest money you can
spend.
OUTSOURCING
1. Handle
outsourcing from others who are trying to reduce costs, by utilizing
the equipment, routines and expertise available to you.
2. Outsource
certain portions of your own production to those who can do
something better or cheaper or faster, leaving you free to
pursue other avenues of production, marketing, or explore new
approaches.
3. In many cases, even
without going in new directions, a company is doing something which
others would be willing to pay to have done on an outsourced
basis.
4. What other types of things can you do to provide new
sources of income? In many instances, companies are doing
certain lines of work for its own production or advancement which
could be monetized and provided to others.
AVAILABLE MONEY
1. Find out what grants,
either governmental at different levels or foundations, are available
for what you are capable of doing. There is money available
even in the worst of times and the basic problem is locating it and
successfully presenting a case. See Finding Money and Jobs the Right Way for a list of grant databases which include both individual and commercial grants available.
2. Hire
someone to identify all of the possible sources from government,
nonprofit, loans, grants, benefits which can be obtained for
any new direction or even for support of the current processes at work
in the company. There are sources which probably could have been
tapped previously but there was no need to even look for them. This can be done through consultancy and be based on
results (success in finding or
procuring these resources), relieving you of all the in-house costs and uncertainty.
ALTERNATIVE PERSPECTIVE
1. Think of yourself as a start-up with the difference being that you
already have a large part of the necessary infrastructure and talent
available to you.
ALTERNATIVES TO REDUCTION AND LAYOFF
1. Reduce salaries with promise to make it up when economy turns around.
2. Do not lay off those who will be needed once there is improvement - they may not be available when you need them.
3. Reduce hours, but help keep the economy running. Resist the impulse to reduce crucial benefits which are needed.
4. If
there is a shift to a new product, ask for volunteer work with
minimum support from those who are no longer needed. This must be very
short period of time, after which they are either placed on full pay,
whatever that is, or let go with minimal support as suggested above.
5. Provide more social amenities in the work
place or somewhere nearby for which people have been paying
out of their own pocket. A sitting service, a day school or other social service where a
modest outlay can save big time for individual workers whose
pay and hours are being cut.
6. Basically set yourself up as a
social service agency for your workers such as it has not been
before, and if done in cooperation with another local company, may cost
far less than doing it alone.
7. Set up self sufficiency classes for those who will need them.
8. If
staff has been fully paid for certain types of jobs which are being
handled through commission in other companies or in the economy in
general, switch to a commission base with bigger bonuses for sales,
prizes, etc which will be significantly lower than full time pay for
possibly higher return. Or pay on the basis of piece work instead of
salary while retaining the social benefits. Just be sure that this is
done, not to make you more money, but to keep the company afloat, and
the employees secure and employed during the difficult period. To
ensure that this is the case, provide a contract which will give
some incentive of
remuneration once the economy turns around.
9.
Help locate social service support for those laid off, or provide
a basic subsistence level even if not covered by company insurance
plans, which is based on what is needed offset by what
they can obtain from other sources, their savings, support by family
groups. In many cases, if the analysis is done well, the amounts
paid out will be relatively small, but it will save the image of
the company, will help those affected weather the storm and be capable
of returning
once things are better or a new branch of the company takes
off.
ECONOMIES OF SCALE
1. Without buyout, are there two or more groups which if
combined could provide economies of scale principally in
delivery, transport, advertising, etc., or SRATC where producing more
of the same product can produce lower costs per unit?
2. Identify other products which can be
produced on an assembly line similar to yours, a product in demand
which can be produced along side of your present product, or while
using a different line but sharing the rest of the same facilities.
SELF SUFFICIENCY
1. Become
more self sufficient as a company with an initial investment in
materials and expertise which can pay off even in the short and long term.
2. Find ways in which you can redefine your work, reduce taxable income,
release property into different forms of safekeeping in order to cut
down on taxes, utilities, upkeep, repairs, etc. How can you do more
with less, and at a lower cost.
3. Can
your facilities be redesigned cheaply to accommodate another group
which can share the cost of the facilities, or give you additional
income.
HELP OTHERS WORSE OFF THAN YOU
1. Give funds to social welfare nonprofits in your town to help them cope with the new influx of people in desperate straights.
SUMMARY
In
situations like these, many people guard their money and retract while
the best position may be to take the risks necessary to go in new
directions which might save the company. People are keeping their hand
closed when trying to get it out of the cookie jar. Put your own money
into any analysis or shift since there is a likely
possibility that you will lose it anyway, or have it severely devalued
if you hold onto it.
If there is any one point which is made
again and again above, it is the hiring of outside analysis. Normally,
it is difficult to assess ones own structure and how it effects and is
effected by the environment, particularly when all of the rules are
changing. This need not be costly. If possible, put money into escrow
and pay on the basis of agreed upon results.But reap the possible short and long term benefits of an outside perspective.
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