Tips for When You Need to Consider Reducing Your Workforce

May 15, 2020

By Matthew R. Kerzner, PhD

Are you in a position to wisely reduce your workforce in compliance with best HR practices and in line with strategy?  Are you prepared to reduce your payroll, while ensuring you can retain top talent?  Will you be in a position to rebuild when the time is right?  

Take our quick quiz below to test your readiness: 

Have you:

  1. Identified your low performing/non-productive workforce? (Think of your lowest 10%) Y/N
  2. Identified your high performers who can take on more responsibilities? Y/N
  3. Prepared an organizational chart to determine any overlap in staff or job roles and responsibilities? Y/N
  4. Undertaken the cost/benefit analysis for conducting a layoff vs. furloughing employees? Y/N
  5. Developed your internal communications regarding the current situation – to convey your strategic initiatives and share ways that team members can contribute to efficiencies? Y/N
  6. Considered outsourcing any work functions to reduce costs? Y/N
  7. Developed standard operating procedures so the employees can be more efficient when they perform their jobs to reduce overtime?   Y/N
  8. Developed clear performance metrics, to ensure you and your employees are clear regarding your expectations? Y/N
  9. Identified any positions within your organization that require specific skills that are harder to replace? Y/N
  10. Developed your external communication to assure vendors, suppliers, and customers that you are executing against a plan? Y/N

If you answered ‘NO’ to any of these questions, there are some things that you can do to begin moving in the right direction:

  1. Think about the immediate skills you will need to have on your team when business begins to ramp up again. List the skills and the people on your current team who have those skills.  These are people that you want to try to keep.  If that is not possible, you may be able to maintain contact with those individuals, with a plan to rehire when the timing is right.
  2. Speak with your tax and legal professionals to determine how you can use the new CARES Act to protect your employees and your business.
  3. Prepare your internal communications by a) being transparent about the situation, b) stating the facts, c) acknowledging the pain, confusion, and emotional turmoil that your employees, as well as you, are experiencing. Let your employees know that you are doing the best that you can.  Be sure that your actions and your words are in line with your values.

Make sure you’re got a good team to help make these decisions. You’ll need to have a strategy in place, and understand your options. Reducing your payroll and redesigning your business model is a difficult task, but with the right support, you may emerge stronger and more focused.  

This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

About Matthew Kerzner

Matthew Kerzner is a Director in the Center for Individual and Organizational Performance and the Center for Family Business Excellence. Matt has more than 25 years of experience in organizational development with a specialization in assisting family businesses and closely held businesses.