Lockdown measures have been extended in several states and the market continues to be volatile, as the spread of COVID-19 is still rampant. At a time like this many business owners may be considering layoffs to cut costs. However, layoffs can negatively affect morale and productivity as anxiety builds among employees, and worsen the state of your finances, where severance pays are in order. In that case, here are some alternative measures to consider, that limit your spending, instead of relying on layoffs.

• Cut back on benefits and other extras:

The first thing you should do is institute a hiring freeze. Apart from this cut back on bonuses, overtime benefits, allowances towards travel, etc. Similarly, postpone all upgrades either of software, hardware and other equipment. You may also want to reconsider any non-essential infrastructural changes that you had planned. 

• Freeze or reduce salaries:

If you can continue to remain afloat while maintaining your employees’ present salaries, consider freezing all increments for the time being. On the other hand, you can also work towards reducing wages if needed by instituting shorter work hours, making performance based cut-backs or furlough workers. Your employees will understand that they can’t expect the business to function normally, and would definitely prefer small setbacks rather than losing their salary altogether. When wage cuts are involved, it is better to start with the upper echelons of the office and work your way down if the situation worsens, in order to preserve morale and productivity. 

• Solicit ideas from employees:

Your employees understand that things aren’t normal now and know that you need to find means to reduce costs. Solicit ideas from your staff about how to cut back on expenses without negatively affecting morale and productivity. In addition to arriving at niche solutions, brainstorming the issue at hand with your employees can ease insecurity, promote solidarity and help them understand your predicament. All of these things are positive factors during a time like this.

• Consider shifting to a virtual office:

During the lockdown, many people have found that they can effectively conduct their business virtually, and could possibly downsize or let go of their office spaces altogether. By keeping your on-site staff to a bear minimum and allowing other employees to work remotely from their homes, you can cut back on a number of expenses including rent, internet payments, utility bills and so on. A number of free or inexpensive software can be used to conduct meetings, work collaboratively, monitor employees and keep track of particular tasks that have been set. 

• Let go of contract and part-time staff:

If it comes to the stage where you definitely need to let go of some employees, then start with the contract and part-time staff. When it comes to layoffs, it is legally simpler and much cheaper to lay off contract and part-time workers than it is to let go of full time employees.

Layoffs may not be the best move as they can affect your company both in the short and long term. So in that case, if you need to cut back on costs, make sure to try every possible alternative before resorting to letting employees go.