Unemployment rates have skyrocketed. Some organizations are already taking the difficult decision to furlough or part ways with some of their staff members to keep their operations afloat. Others are taking some time to see how the situation evolves and become creative in their strategies to cut personnel-related expenses. See below for actions that your organization can take to reduce expenditures:
Explore ways to save on office equipment, space, energy, conferences, and travel and redirect those funds. If your team is able to maintain or gain efficiencies while working from home, you can assess if you can continue with this model long-term. You may be able to renegotiate contracts to extend these savings after the pandemic is over.
Institute a hiring freeze for nonessential positions. Utilize availability and/or divide responsibilities within your team to meet your daily operations. If possible, restructure some roles and responsibilities. This way, you may be able to continue functioning with the same workforce and without needing additional personnel.
Check the new federal and state offerings:
Paid and unpaid COVID-19 related absences - Emergency FMLA, Emergency Paid Leave, NYS Sick Leave
Short-term cash flow assistance that can be partially forgiven under the Paycheck Protection Program
Review your retirement provisions to see if your plan already allows for hardship distributions and loans. If it does not, decide if you want to add such options so that your employees can withdraw funds without penalty.
Revise the perks and benefits that you provide. Some of your offerings may not be mandatory and can be reduced or removed at any time. Things like retirement match or profit-sharing distributions may be discretionary and thus can be put temporarily on hold. Talk to your retirement broker before making any decisions – you may need to update your plan documents before proceeding.
Evaluate cutting your executive team’s salaries briefly. Highly compensated staff may be willing to take a pay cut if it means keeping their teams intact until revenue projections improve.
Ask employees to slowly make use of vacation time. This strategy will help gradually decrease the number of days accrued and available for payment in case terminations are needed down the line. In the meantime, it ensures your staff is employed and receiving compensation.
If you have any questions or comments or would like to discuss additional ideas, please reach out to your HR representative.