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The pandemic has affected the bottom line for many companies within the pharmaceutical, biotech, and clinical research fields, and has made businesses more vulnerable. While it seems logical to lay off employees to cut costs, layoffs may not be necessary to weather the storm. Here are some alternatives to layoffs.
The Problem with Layoffs
No one enjoys laying off employees and no one likes being laid off. It is stressful for both parties involved. However, layoffs may be even more traumatic during the pandemic because employees are already dealing with an unusually high level of stress and anxiety. Before even considering laying off employees, you should look at your finances and see if there are ways to save money without affecting the jobs of your employees. If you are at a point where this is no longer possible, approach the situation with compassion.
Limited Hours
Another way to save money is to reduce the hours of your employees across the board. With reduced hours, some of your employees might still qualify for medical benefits, which is so important right now. Employees will likely understand that the salary reduction is necessary but will appreciate that they still have an income. This also saves you the hassle of finding new employees to hire when the pandemic ends, and your company recovers.
Furloughs
Although not ideal, furloughing employees can be a smart alternative to layoffs. Instead of firing them completely, you can put them on temporary unpaid leave. This can be a good compromise because companies can save money, and employees will still be able to apply for unemployment. It also helps reduce stress on employees because they know they have a job waiting for them when the economy recovers, which eliminates some of the pressure to find a new source of income.
Vacation Time
Some companies may have a policy that allows them to provide employees with unpaid vacation time. This may be a strategic loophole. You will be able save money on payroll while still allowing employees to maintain their employment, as well as their health insurance benefits.
The pandemic is an unprecedented crisis. There is a lot of uncertainty surrounding it because we can’t expect the pandemic’s impact on the economy to follow the same trend as a regular recession. For businesses who need to cut costs to stay afloat, one option is to lay off employees. But this should be a last resort. Instead, companies should do what they can to cut costs in other areas. If they come to the conclusion that layoffs are necessary, they should approach them with empathy. Everyone is struggling right now, so we need to do what we can to support each other.
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