5 ways to reduce costs without laying off staff
When faced with sudden cash shortages, many businesses start laying off staff. But there are alternatives that can help. Here are 5 ways to consider for your business to reduce costs.
Businesses right across the country – and the world – are feeling the devastating impact of the COVID-19 pandemic. Many have been forced to shut down indefinitely due to government mandates around non-essential industries, especially in the retail, events and travel sectors. However, the knock-on effects are influencing almost every industry.
As a result, business owners are looking at ways to reduce costs in order to stay afloat. Unfortunately, reducing your business’ head count is often one of the first solutions that comes to mind, but it doesn’t have to be. Here are five other ways to cut costs without laying off staff.
Many businesses have already shifted their operations entirely online – and for good reason. Allowing your employees to work from home means you can cut down on overheads like rent and utility bills, while also giving your team more autonomy and flexibility with their day-to-day activities.
Flexi-work arrangements have been shown to help improve employees’ productivity – not to mention boosting their overall wellbeing. When combined with any potential cost savings, it could turn into a win-win situation for your business.
No one enjoys losing out on work hours, but what’s even worse is being made redundant. If you can no longer afford to keep your entire team on a full-time wage, consider reducing their hours. This way, you can continue to keep them on payroll while lowering your outgoing expenses temporarily.
For example, instead of having two people in your marketing department working Monday to Friday, you could have one person work Monday through Wednesday and the other work Thursday and Friday. Then they can switch every other week to ensure they get a five-day fortnight.
Banks and lenders understand the tough financial situation that many Australian business owners find themselves in. Current measures include repayment relief, where business loan payments are deferred for several months, as well as deferrals for credit card repayments and annual fees.
If work has dried up and you can no longer afford to retain some employees even on part-time wages, then talent loaning could be the solution. Over the coming months, many businesses are likely to be inundated with work and might need to hire staff quickly. Talent loaning can provide them with qualified people from your team without the traditional lengthy recruitment process. It also means you don’t have to worry about covering their wages or super, while the employee gains new experience without losing their leave entitlements.
Alternatively, if your business has departments that are busier than ever, you could offer your employees in less-busy teams a short-term transfer to keep them employed, which could also, provide strong cross-skilling in your business.
In times of uncertainty, business owners can be quick to lay off staff to make short-term savings. But the alternative – retaining employees while cutting costs elsewhere – can see you hit the ground running when business returns to normal.
The JobKeeper program is a Federal Government initiative and we provide a link to the external site for your convenience. This information is provided for general information only. Please read the Government’s fact sheet to see if you are eligible and for terms and conditions that apply. You should consider seeking independent legal, financial, taxation or other advice on how the Federal Government initiatives relate to your circumstances.
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business.