HR Roundtable expert Bill Pinto discusses a variety of strategies companies are currently using to cut costs in this tough economy:
All across the country, employers are dealing with reducing their costs. Labor costs often are the largest segment of an employer’s costs, so that is the first target. There are a number of areas that could be cut, but after identifying which areas to cut, the more important part is determining how those cuts will be made.
Salary reductions are an alternative to laying off a segment of the workforce. Employers can retain more of their employees – and the knowledge they possess – by cutting salaries instead of letting people go. The simplest way to reduce salaries is to cut them across the board by a certain percentage. Some would argue this is also the fairest way to make these decisions. Others would advocate more of a Pelosian approach of no reductions or smaller reductions for those employees earning less and steeper reductions