Lay off employees or decrease salary, what would you do?
Times like this are not easy for management and employees, but manager's sometimes need to do what is right to keep the company above the surface, even taking unpopular measures.
Some context first, you have a company and you have to take one decision to keep the company running. I have 4 scenarios in my mind right now and the result of each scenario is different in terms of revenue but each one of them will save the company from going bankrupt:
- 25% of salary cuts and ask your employees to work 100% of the time
- 25% of salary cuts and ask your employees to work 75% of the time
- lay off 25% of the employees, keep working with the remaining 75% of employees full time
- ask for 3 months of unpaid leave from each employee
This scenarios are coming back in my mind and I am trying to think as a company manager/owner, not as an employee. What would you do?
What about going a bit differently: lay off 15-20% employees and allow the rest to switch to less than 100%. I explain my motivation: 1. Salary, once negociated must not decrease, as people plan for it ( credits, other financial commitments). If a company would just decrease salaray, it risks losing more employees than initially planned. And the rest will just be looking for opportunities to jump off the ship. 2. Letting go employees allows them to look for other opportunities and not just settle for a lower income. 3. Part time work is even a perk for many, so it might turn out to be to the employee's benefit. Making it optional, only the employees that want it would consider.