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Tips for Laying Off Workers During a Crisis

The public is led to believe that laying off a worker may be the perfect option in finance for business recovery, rather than a knee-jerk reaction to the COVID19 crisis. Hundreds of workers have been laid off after the coronavirus outbreak, and many are at home mourning the losses of the “necessary” but critical option. Here are some factors we might think about before laying off employees due to a pandemic or natural disaster.

Reduce Overhead Expenses

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Reducing overhead and restructuring our capital might just be one way to mitigate further losses during a disaster. In fact, in almost all cases losses occur because between and with your facility and resource providers. An example of reducing expenses is to use pre-assembled equipment during the day and schedule a much more organized and well-specified workload.

Simplify the Workload

Reducing or managing the workload could be a smart strategy to reduce further business losses. In some institutions, we have too many workers duplicating and repeating similar tasks without the need for specialization. Once we have some skills in one place, we could decrease the number of people performing a comparable function, reducing trial and error, persistence, and interruptions due to errors. Having more staff does not necessarily improve efficiency, but having much more skill and understanding of the operation improves the quality of the outcome. By having trained and qualified staff, we minimize overtime and labor hours to get the job done. This powerful step also affects the company’s overall working capital.

Restructure Working Capital Budgets

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The moment we spend unnecessarily, we may find ourselves exceeding the working capital budget. This important aspect of business finance establishes the basic framework for keeping everything in your company running consistently. However, if some executives’ and employees’ compensation packages are exorbitant, they are likely to significantly affect the company’s profits and losses, especially if a tragedy occurs.

Here’s an example: if we’re paying insurance premiums of 100,000 per month in case the company can be delayed by a catastrophe, we’re replacing those high amounts with additional employee coverage gains that can triple our profit from that amount in the same particular month. Conversely, it can be devastating and bad for business if there are no contingency or insurance plans for the company’s operations.