Informations Systems Consultant

We are all aware of the fact that the world economy has become so deranged and taken a downhill dive that has seen many businesses struggling to maintain a healthy profit margin. Most companies have already put cost cutting measures in place and some are still trying to find solutions to the economic meltdown to ensure business survival.
Profitability and survival are the key purposes for all functions in an organization and here I will highlight a few ways that the HRM function and work on cost cutting while ensuring that both the employer and the employee share the burden and both still survive in this tough times.
  •  Reduction in Salaries
We all agree it is better to have ‘some’ income than to have ‘none at all’. Therefore, most people will agree to a cut in their pay than loss of the job. This has to be done within the legal set up of the country in which you practice bearing in mind some countries do not allow reduction in the basic salary so you might have to work on the allowances.
Also, this has to be clearly communicated to the employee and if possible it is better to give a time frame until which the salary will be revised again.
If your organization has a Union, you have to inform the Unions and get their input in the revisions too.
  • Eliminate or Reduce Leisure Benefits
Some companies spend hefty amounts of money on employee leisure benefits, e.g. club memberships, Sponsoring trips and activities for its employees.These are things the company can tone down on or ultimately eliminate from its expenses. If it is absolutely necessary to have the benefits then it will be better for both the employer and employer to share the cost at agreed on percentages. Another way is that the company could come up with a way for finding discounts on leisure activities and inform the employees or decide to go only for the discounted ones.
  • Increase/Introduce employees contribution to health plans
Good health is a cornerstone of efficiency and optimum productivity and it somehow has to be taken care of.
If the employees already contribute to their health plans, increasing their contribution will reduce the costs footed by the organization. However if the organization bears the full cost of insurance it is a viable cost cutting idea to introduce employee contributions.
  •  Reduce working hours
Employees working hours/ days can be reduced and the employee agrees to be paid for the hours/ days worked.
This should be done within the legal system of the country in which you practice because some countries do have laws against such practices.
  • Proper work plans to reduce overtime
Scheduling of work should be done to fully optimize the manpower within the official work hours and reduce/ eliminate cases of the employees doing overtime unless it us after all, overtime is extra pay that is calculated at a higher rate and that is costly.
  • Give compensatory leaves
In cases where working extra hours is absolutely necessary, the employees could accumulate the overtime hours and take as compensatory leave instead of being paid overtime.
  • Compulsory Unpaid leaves
During low production seasons, employees can be sent on compulsory unpaid leave and recalled as soon there is work for them
  • Paid Volunteer programs
In this case employer taps into the employees’ special skills, spare time (with which the employees need to make extra money) and the need for employees to develop.
 For example: Instead of outsourcing a trainer, a willing and qualified employee can give training as per the organizations need and be paid for it.
Employees with time to spare after work and are willing can be paid to do data entry for the company instead of hiring another person with a full salary and benefits.
The condition for employees being let on to the paid voluntary programs is that their regular jobs must be done efficiently and so should the tasks they volunteer to do so that you still maintain the best quality.
  • Employee lending
Have you watched the European Football games and you hear of Players being ‘on loan’ in other clubs when they are not needed by their clubs for a season? Even organizations can try that.
Considering the Laws of the land and the Union agreements; an organization can lend its employees to other organizations when there is no work for them to do. This might actually be a moneymaking venture for the organization and the employees gain new experiences and work practices that can help improve the firm and also develop the employee.
The bottom line here is to ensure that we reduce lay-offs but still cut costs. It is clear that in some cases, the number of employees has to be reduced first then the other softer measures are put in place. However I believe that any HR practitioner would like to explore other options before cutting the source of income for any employee.
Ultimately being a HR Practitioner makes you an employee who has to think like an employer and find a pivot point that works for both the employees and employer. 
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