Shawnee Love   •  
January 14, 2016

When the economy tanks, businesses look for ways to reduce costs.  Being that labour costs are a significant proportion of most company’s expenses, the temporary layoff option is often considered.

Stopping the bleeding is critical when a business is losing money, but the short term financial savings of temporary layoffs can conceal the long term problems with them.  Here are some of the problems you might want to factor into your decision making mix:

• Decreased loyalty among “surviving” employees who feel their trust in you has been broken,
• The laid off employees find other work and do not return when you need them back,
• Finding and training new talent in the future can be more expensive than keeping current employees working,
• Lay offs take a lot of thought and planning which takes your eye off of searching for new business,
• Down time can be a great time improve systems, train people, and clean, repair and organize your workplace,
• Customers and suppliers who hear about layoffs may worry about your company’s viability,
• Government incentives and grants tend to be offered to companies who have not laid off employees in the past 12 months, and
• Candidates can be wary of companies who have recently laid off staff.

If layoffs are your only option left, consider asking if anyone wants to be laid off.  I have heard of two situations recently where employees volunteered.  More on those scenarios next week.