3 Alternatives to a Lay-off

Many times when employers are faced with economic results below their expectations, as so many of us are right now, the first thought is to lay off employees. I think that other alternatives should be reviewed first since any reduction in force will require a business justification that may be challenged in litigation.

Involving your employees in the decision-making process may yield some interesting and effective cost-saving measures. It will also give them a real idea of the situation you are facing and give them ownership in the final decision.

Here are just 3 alternatives:

1. JOB SHARING: This is a flexible schedule that allows two part-time employees to share one full-time job. By reducing both employees' hours or schedules and sharing one job, you reduce your employee costs (including taxes and benefits) and still get the work done. Some employees welcome such schedules. This also "saves" the jobs of two workers.

2. INDEPENDENT CONTRACTORS: These folks, also known as freelancers, can handle some jobs that you currently pay a full-time or even part-time employee to perform, such as payroll processing, benefits management, IT support, graphic design, or you name it. By hiring an IC, you save the costs of taxes, OT, benefits and workers' compensation insurance. BE CAREFUL, though. Be sure you have a written agreement and don't control the method and means of the contractor's work - just the outcome.

3. TEMPS: Using temps in many instances allows you to protect the core workforce and save the costs of benefits, certain taxes and administrative expenses. It can also avoid or at least minimize your liability under workers' compensation, unemployment and other regulations. Aside from the benefits of using temps, there are some risks. Be sure the contract you sign with the temp agency provides for indemnification and proof of insurance should a joint-employment situation arise. If disciplinary issues arise or time off is requested, refer those issues to the temp agency and be sure they participate in the resolution of the issue. Limit the duration of the temp employee's tenure with your company. The longer a temp works for you, the more it looks like they are your employee.

These are only 3 options to look at during this business cycle. I will post additional thoughts in the next couple of blog entries.

If you have immediate questions or concerns, do let us know. We'd love to help you.