You Must Align These Expenses to Cash

Employee costs are likely one of your greatest costs. You must reduce them but do so with compassion and with the creativity to help them the best you can.

This is tough stuff. You must reduce your employee expenses. And for many of us this is a large portion of our expenses. But you must reduce these costs. This can take the form of layoffs, but you can try to be creative to help employees.ย The most important thing you need to do is to align your expenses and outlays to cash.

“We WILL get through this together.”ย 

Here are a few ideas:

  • Split One Job into Two or Three.ย It’s better to give employees the opportunity to get 1/2 or 1/3 of a salary than no salary.
  • Tie Compensation to Results:ย you may have to reduce base salaries and tie salary to results you get – especially results that deliver sales or cash or reduce expenses.
  • Working for Benefits: for some employees, even though you can’t afford them, they really need benefits. So even though you may have to reduce their base salary, perhaps you can leave them with benefits.
  • Working for Free for a While:ย you may have to ask employees to work for free for a while. You can make this temporary or even give them equity in your company.

These are tough decisions that require leadership but everyone must understand these times. In the end, they need to do what is best for them and their families but sometimes in a best case scenario you can use these creative means to keep them aboard until the virus wanes.

Follow Us on Social Media

Where do you go for answers?

Try It for Free

Our Learning Community is the one stop shop for the intelligence you need. Instead of countless hours searching for answers, we’ve organized what you need to know across all of the business and personal issues you face. You’ll get answers from 100s of learning modules, tools and templates, vendor reviews and a vibrant community of your fellow entrepreneurs. Try it for free!

Share The Lonely Entrepreneur