How to Trim 40 Hours off Payroll
When a company is in trouble, it must look for ways to cut costs. Once you have determined the need to cut 40 hours off of your payroll, it is time to decide the best way to do it. However, do not assume that this means that you will have to fire someone. Instead, do your research and study your employees' hours and tasks. Unless you have a nonessential employee who you can afford to lose, firing a worker to cut 40 hours should be a last resort.
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Instructions
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Place a cap on overtime. If your employees regularly work overtime, you will need to put a cap on the number of extra hours allowed per week. Find out who is putting in the most overtime and why. Talk to workers to determine what must be done for them to complete their essential duties in a shorter period of time. Determine which employees have the ability to help those who are overwhelmed. A receptionist may be able to alphabetize paperwork for filing in between phone calls, while an events coordinator, who may have fewer activities when times are tough, can take on more advanced duties. Whatever it takes, BusinessWeek.com recommends that you communicate with your employees to ensure that they understand the importance of pulling together in these tough times. Let them know that lending a helping hand may save their jobs in the long run.
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Cut employee hours across the board. Rather than eliminating one 40 hour position, ask your employees to reduce their time by one or two hours apiece to meet the need. Call your employees together and explain why this action must take place. Show them the numbers and tell them that this must be done in order to avoid laying off workers. Once your employees understand why, they may be more likely to take a cut in hours willingly in order to save the company and their jobs. Ask for volunteers before enforcing it. You may be surprised to find that one or more employees are in a position to take a cut without having to adjust their lifestyles. In fact, some may welcome the excuse to work fewer hours each week. If you are unable to trim the required 40 hours with volunteers alone, then you should divide the remaining hours evenly among all employees, without exception, to avoid any allegations of unfairness.
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Cut one full-time position. If you have a full-time employee who is planning to retire or move on to another job in the near future, do not refill that open position. To do this, other workers will need to take on the duties of the job. Study your organization and your employees to determine who is qualified to take on this employee's former tasks and split the work so no one worker ends up doing the job of two people alone. However, If you do not have an employee who is leaving and, if you have made as many cuts as possible in other areas, you may have to enforce a layoff. Entrepreneur.com suggests letting the lowest performers go. While this is hardly a happy prospect for most employers, sometimes layoffs are unavoidable.
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