I thought I would share some creative ideas from our technology clients about what they are doing now that their sales pipeline has dried up, projects are being cancelled or delayed, and receivables are at risk. Before you start laying off your team, here are some ideas to consider:
Organize a group call with team members to honestly and openly share your situation and concerns, and ask for ideas and input on how best to cut costs. You will be surprised how many good ideas your employees have. This also increases solidarity around decisions made.
Put people with extra time to work on new strategic revenue generating opportunities, E.g. creating a new industry solution, building new monetizable and differentiating IP that solves COVID related new challenges, etc. Leverage the intellectual capital you have in your organization in a new way and create new revenue streams. Think of all those important strategic projects you never have time for or rarely want to release billable resources to focus time on. You may come out of this leaner but, hopefully, better positioned for the future.
Institute a shorter work week and reduce pay equally across all employees, i.e. move to a corporate-wide 4-day work week. You can cut your salary expenses by 20% without layoffs while giving employees a long weekend, every week.
Restructure the business to be more focused on industry or specializations. Conduct a skills audit and be strategic about whom you lay off and why. A remote selling, SaaS business model requires different skill sets and behavior, this may be an opportunity to re-organize.
Offer optional unpaid vacation time or temporary leaves of absence. Some individuals will appreciate and value a break from having to work or take the opportunity to self-educate, etc.
Ask for voluntary job sharing, and divide one job by two individuals. Anyone with kids trying to work and home school their children right now may appreciate working ½ time.
Offer early optional retirement severance packages to long term employees.
Cut extra costs – for a specified period of time, freeze new hires and extras such as bonuses, raises, and unnecessary equipment purchases.
Move sales professionals to pure commission where possible, rather than laying them off.
Consider across the board salary reductions, starting at the top and cutting those the deepest.
Calculate actual costs of layoffs, severance, and risk of litigation, not to mention survivor guilt and overload. Consider future recruiting and training costs, which will be incurred again. All these will function to offset any short term benefits.
Move some full-time employees to contract positions, allowing you to at least offer them some project and outcome-specific work, rather than no work at all. You can re-hire them later when things improve.
Explore and leverage any government COVID-19 programs, support or funding to help supplement salaries.
Communicate frequently, honestly, and compassionately. Saying nothing creates uncertainty, fear, and unnecessary stress while impeding productivity.
I am not a lawyer, so before making any of these changes, consider seeking legal/HR advice.
Those not facing cash flow concerns are using this time to strategically hire recently laid off, highly qualified new resources with specific skill sets that would normally be difficult to recruit. Others are infusing resources into smaller, struggling companies via partnership, merger, or acquisition.
If I have missed any good ideas, please share them here. I hope this helps trigger some creative thinking at a difficult time.