Layoffs not an option for some businesses

[sledgehammer]

<snip>

Costco Wholesale Corp.'s profit is down 27 percent year-over-year, but the discount store has not laid anyone off, choosing instead to freeze hiring at its corporate offices. The only workers let go have been holiday seasonal hires.

The company says it recognizes that labor remains its most valuable — if costliest — resource.

"We're certainly sharpening our pencil everywhere we can," said Bob Nelson, Costco's vice president of financial planning and investor relations. Nelson couldn't recall any layoffs at Costco since the closing of some stores in the 1980s.

Other steps companies are taking to cut costs are not exactly harmless to workers. Chief among them: capping the number of hours employees can work, cutting or freezing pay and suspending matching payments to 401(k) plans.

Casino operator Wynn Resorts is trimming pay and cutting back on retirement fund matches. Credit agency Equifax Inc. froze pay for all U.S. employees for 2009 and at some of its foreign offices as well.

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That's because many companies have concluded that layoffs could be costlier down the road. Employers who have laid people off have to find, hire and train new ones when the economy recovers. Workers with specialized skills or strong customer contacts aren't easily replaced.

Marvin Windows and Doors, a Minnesota company, hasn't laid off any of its 5,300 workers — despite the collapse of the housing market. Its sales were flat in 2008 and have fallen this year.

"We can't easily replace skilled craftspeople and their decades of experience," said Susan Marvin, president of the company.

Instead, Marvin Windows and Doors has trimmed the time factory workers are on the clock — from 40 hours a week to 32. It's a sacrifice David Peterson, who is 56 and has worked there for five years, is willing to make.

"You may have your hours cut, and that's not easy," said Peterson, who maintains machinery for the company. "But you still have your job, which gives me a lot of peace of mind."

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http://www.google.com/hostednews/ap/article/ALeqM5j8syRH3Yql9spyutiYQsw5TJdztwD97DD1F00

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There are many things employers can do to avoid layoffs. My company just did a round of layoffs. I asked my boss if there was any way to save the one person who was laid off in my group, even if it meant sacrifices on the part of those still on board (benefits, hours, etc). But the decision came from the top, and there was no way out. We lost a lot of good people, and once things pick up we'll just have to re-hire new people to fill the slots. Plus, the costs in firing and re-hiring somewhat offset the savings. And, in the meantime, we'll fall short of the stuff we need to get done.

I can see where layoffs will bring $$$ savings (since that's corp mgmt's goal) if a product/service is discontinued. But when you want to get the same amount of work done with less people, it's often a losing battle.

[bertman]

1. My company is going through the same thing as yours, Sledgehammer. We decided to

"spread the misery" by rotating weeks missed at work so our employees could draw unemployment for the weeks they miss, but not lose their jobs and benefits. Of course, if the economy gets worse we will have to start scaling back benefits and make further cuts in hours worked.

So far, everyone is pulling together on this. There are a few of our folks who are selling jobs and running them who have not had to miss as much work as others but they are the ones who keep the rest of us working, so no one complains.

We will continue to keep all of our employees on the payroll until we have no choice but to lay off some. This system does involve a bit more work for our office manager, as well as a bit more scheduling time coordinating who works on which projects. We try to keep everyone informed about how the job prospects and the schedule look. Being informed seems to help everyone cope with the uncertainties. Our opinion is that when we come out of this downturn we will have our tried-and-true employees on board and ready to work. That's the best investment an owner can protect.

[sledgehammer]

3. Thanks for sharing that

I hope your company is able to save its jobs, and that layoffs do not become a necessity.

Totally agreed that the "tried-and-true" are the best investment. And if I were an employee of a company like yours, I would be indebted to a company that did whatever it could to save jobs. It speaks a lot to the commitment of management to its employees.

[bertman]

4. Now that I'm re-reading my post I think I should have put investment in quotes.

I did not mean to imply that we only think of our employees as an investment (even though, of course, they are when you consider training, company culture, operating policies, etc.). They are all very good people who are honest, work hard, are professionals in the truest sense of the word, and take very good care of our clients. We know them and their families and want to do our best to ensure that they and the company survive and thrive.

[sledgehammer]

5. No need. I understood it the way you intended! :) n/t

[Dr.Phool]

2. I went to Costco yesterday.

I noticed that food prices had gone up considerably. And a few items that I can only find there, weren't there.

However, I did find a DVD of "Dr. Strangelove" for $7.99!

[4dsc]

6. I believe the French had a good idea

I seem to recall that French companies, instead of firing or laying people off during bad economic times, would instead reduce everyone's hours so that everyone would remain employed.. Instead of everyone working a 40 hour week, they would work a 32 hour week..

Its too bad more US companies don't follow these examples..