Managing staff costs during a recession is mandatory for the survival of the company. In addition any staff costs saved will immediately be transferred to your profits. This will look good for the company when your profits are padded somewhat. That being said, managing your staff costs during a recession should be carried out after a careful study. As much as possible the workers should be kept informed and involved about any pending cutbacks. You do not want your staff or workforce demoralized and guessing as to what their fate might be. Nor do you want the customers to be inconvenienced.
The first cutbacks should be to workers doing non-essential jobs that were recently added because of a booming economy. They are the least trained and the least necessary, and can be cut without any damage to manufacturing or service to your customers, who are the lifeblood of the business. If an increase in hours in a specific task is needed, let the hours come from the workers already on the payroll. This will make them feel more secure in their positions.
Assuming more cutbacks are needed, think it out carefully. How much the cost was for these workers to get experience. You would not want to have trained workers for your competitors. If the cost was substantial, it might be to your interest to furlough them at a percentage of their salary rather than cutting them loose. You will have a ready-trained workers should the economy start to improve.
Be prepared for the next downturn or recession which is inevitable. Any non-essential workers should be hired as part-timers to save the company the cost of expensive benefits, at least until an alternative government health plan comes into being. Perhaps outsourcing to cheaper foreign countries might be considered by your company.
In today’s topsy-turvy economy you may think employee turnover is not an issue. You couldn’t be more wrong. The expense of replacing a lost employee goes far beyond the simple loss of productivity created by their absence. Advertising, interview time and training all combine to make a serious dent in any company’s personnel budget. Raises, health insurance and paid vacations are all good investments in your employees. They are not, however, always economically feasible. There are other, more cost effective, ways to increase employee satisfaction without wiping out your bottom line.
This is not to dismiss the importance of fair and equitable compensation. Everyone wants to be paid what they are worth. No matter how much you love your job, if you can’t make your bills you are not likely to stay. Ask any actor who has served his time on the midnight shift at Denny’s and you’ll find they agree.
So, based on the assumption you are paying fair-market value for your staff, what else is there? Consider this; according to a 2008 study conducted by the U.S. Bureau of Labor Statistics your average American age 25 to 54 spends more time working than they do on any other activity, including sleeping and caring for their families. (U.S. Bureau of Labor Statistics, 2009) In short, the office has become the new “home” and coworkers our extended family.
As such, the paradigm for a “good work environment” has changed. Today’s employees require more than a paycheck, they want validation. Applaud your worker’s successes and help them learn from their failures. Remember their birthdays and know the names of their spouse and children. Offer a clear sense of direction and train your staff well. Give them these few simple gifts and you will be rewarded with loyalty, dedication and longevity.
One of the most critical components of the successful operation of any company is adequate business research. Too many entrepreneurs fail to do their homework, and make tragic mistakes as a result. Business research is necessary when contemplating new products, new services, new advertising techniques, or any other significant changes. Although it doesn’t have to be a complex process, it is an absolutely crucial step.
Doing business research can be as easy as forming a test group that shares common characteristics with potential customers. If focus groups are not an option because of cost, consumer surveys can also be an excellent avenue for obtaining pertinent information. If nothing else, current clients can be contacted for their opinions and suggestions. Brutally honest information can also be solicited from friends and family, but be careful not to allow it to hurt personal feelings Family members will typically not pad their opinions, but sometimes it is harsh criticism that brings about the most needed changes.
Another valuable resource of necessary information is other business owners. Even though competitors may be opposed to sharing data, other entrepreneurs normally are not. In fact, small business operators thoroughly enjoy discussing their strategies, successes, and even their failures. The local chamber of commerce can also provide feedback and ideas in the form of past experiences of their members. If a entrepreneur or other professional can find a way to share referrals and clients, an exchange of information is much easier to come by and could also lead to a very profitable relationship in the long run.
Performing business research can make the difference between succeeding and failing, and that should be plenty of motivation to spend a little time learning. It can either be in a formal or an informal setting, and it doesn’t have to be long and arduous. Analyzing new ideas or studying current methods can prove to be a very exciting undertaking, and the efforts will be apparent.
Posted By: Business and Finance Net
The economic downturn or recession is upon us. You must improve your profits or keep them stable. Cutting salaries is the sure way to get your bottom line in shape, but in doing so you must be careful not to harm the quality of the business. By going through the numerous agencies that supply engineers from India, through a visa waiver, your quality will not suffer. The Indian worker speaks English, is industrious and has great expertise in the technological field. India is a source of a great percentage of software programs.
Study the agencies that will supply your business with Indian engineers. Then go ahead and use them to recruit engineers to come over here and work for you. The salaries they will expect are far lower than you would have to supply American workers, with less complaints. The Indian engineers will be most appreciative that they have received an opportunity to live and work in the United States.
To Google and very many Silicon Valley companies, the Indian engineers recruited to work for them make up a high percentage of their workforce. Actually half the engineers in Silicon Valley were born overseas. Even the founders of several Silicon Valley companies were born outside the United States. Jerry Yang, the founder of Yahoo was born in Taiwan. And Google’s co-founder was born in Russia. His name is Sergey Brin.
A shortage of well-trained American engineers exists. It is imperative that your company look abroad to the vast pool of engineers and recruit some to come over to the United States. Without this recruitment American ingenuity will suffer and we will be in danger of losing our competitive edge in engineering. Just to hire Americans at the expense of innovation is a mistake. Doing this will inevitably lower our living standards in the future, by having our productivity suffer.