Creating Flexibility in Your Employee Work Schedule to Cut Costs

Even as the economy shows signs of revival, several economic indicators, such as consumer confidence, consumer spending, and the nation’s unemployment rate, suggest that it will still be a tough road ahead for many small businesses over the next few months.

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Those small business owners looking for ways to get through this difficult economic period may want to re-evaluate their employee work week and/or hours of operation. Not only will this help to cut costs and improve overall productivity, but it may also help small business owners to hold on to their workers.

Here are a few of the most popular flexible work scheduling options among employers and their employees:

1. The Compressed Work Week

Many businesses big and small are realizing the advantages of operating on a compressed work week which include: less commuting, a reduction in utility costs, and a more productive workforce. All of this is accomplished without dramatically changing the actual amount of hours an employee works or the business’ operating time. There are several ways to set up a compressed work schedule:

  • A 4-day work week with 10-hour shifts

  • A 3-day work week with 12-hour shifts

  • Working for 9 or 91/2 days, every two weeks

2. Flex Time

With a flex time schedule, employees work their usual amount of weekly hours, but are granted flexibility when it comes to their starting and stopping times. So, for example, one employee might choose to begin work at 7:30 am and end at 4:00 pm with a half-hour lunch period, while another person could start at 10:00 am and work till 7:00 pm taking an hour for lunch.

3. Job Sharing

With this flexible work option, two or more employees share the same position either by being jointly responsible for that position or by splitting up the functions of a particular job. This option is best for those businesses that require additional tasks be done but cannot afford to hire additional workers, or those businesses that have been forced to let some workers go thereby leaving gaps in work productivity.

4. Telecommuting/Teleworking

In this scenario, employees work from home instead of commuting to work. Advances in mobile technology, communications, and computing have made home-based employees increasingly more productive and versatile. Some businesses choose to have such employees work exclusively from home; others require a combination of home-based and office-based hours.

5. Reduced Hours, Days Off, and Unpaid Vacations

This final option is typically the least desirable from the employee’s prospective, but it may be a better choice then laying off workers outright. Either employees can cut back their weekly hours, or take days off (for example, not coming in every fourth Friday of the month), or they can be given the option for unpaid vacation time.

How Small Businesses Can Retain Employees in a Recession

In the midst of all the outrage surrounding AIG’s infamous bailout bonus packages, a surprising detail has emerged. The so-called “retention” bonuses were paid to 52 people who have packed up and left the company. Though one could perhaps argue that the people who left technically could afford to leave, and anyway they weren’t doing such a good job in the first place, it still raises two powerful questions: 1. How could the powers that be at AIG be so out of touch and unconcerned with employee performance?, and 2. Shouldn’t the “generous” benefits have made their employees more loyal to the company?

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It’s very clear to me that the two are connected…

Employee loyalty does not begin and end with benefits and perks. A benefits package is only one piece of a bigger picture. Employees also need to feel appreciated and noticed; they need communication and feedback; and they need to feel that the work they are doing is challenging, yet doable. Basically, it all boils down to the fact that employees need to feel that they and their contributions to the company are valuable. Once that is in place, it makes it easier (though still not easy) for employees to swallow any necessary reductions in benefits and compensation without immediately fueling dreams of leaving the company.

This should come as consoling news to small business owners who have been forced to cut back on employee benefits and have had to let go of employees in response to the recession. Many of these people are dealing with low employee morale and worry that key employees will leave once the economy rebounds.

So what can small business owners do to retain employees and keep up the morale in this recession? Here are some points to keep in mind:

  • Make employee recognition a priority. It is human nature for people to want recognition for their input and hard work. Some free or low-cost ideas include: personalized “thank you” notes, sending along a compliment made by a customer or co-workers, and giving out gift certificates to high-performers. But keep in mind here that your comments and actions should be sincere to have the desired effect.
  • Ask employees for feedback. Your employees are one of your most valuable assets. Ask them for advice on how they can do their jobs better and how the company as a whole can improve. You may be surprised to hear what ideas your employees can come up with. Even if an idea is not beneficial or feasible, you should still let your employees know that you considered what they had to say.
  • Keep your employees up-to-date. One important element in being able to allay your employees’ fears about their job security and to boost employee morale in general is to be open with your employees about where your company is holding in terms of its performance and finances. But there is one important caveat here. You will have to determine an appropriate balance between disclosing information and withholding it. Openness does not mean you have to tell your employees everything. You may need the assistance of an HR consultant to help you determine what to say and what not to.
  • Be creative about benefits. Though reductions to your employee benefits may be inevitable, it doesn’t mean that all is lost. Here are a few tips to reduce the expenses of your health care coverage without giving it up. You can also seek out low-cost seminars for your employees, such as having someone come in to speak about financial planning.


How Small Business Owners Can Reduce the Stress of Laying-Off Workers

In the face of a glooming recession, much of the business world has adopted a hang on mentality when it comes to their employees. Rather then having to go through the process of loosing and later replacing productive, experienced workers, many companies are doing whatever they can to keep their workforces intact. Currently, the most popular cost-cutting tactics include: establishing four-day workweeks, unpaid vacations, and flexible work schedules along with wage freezes and cuts in pensions and health care coverage.


But for many smaller businesses even these tactics are not enough to keep them from letting go of their workers, and that can put a tremendous amount of strain on the small business owner.

In a small business where connections to employees naturally tend to run deeper and are more personal, having to lay off workers can be a painful blow– both emotionally and psychologically. Moreover, having to loose employees can often signal the end of a small business (After all, wearing multiple hats can only happen when their are enough heads to wear them.)

If laying-off employees in your small business seems inevitable, then here are a few tips to help make the process less stressful- for you and your workers.

  • Be open with employees about the status of your business and their job security. It goes without saying that letting go of workers is not an easy situation, and you can expect that your employees may not take the news so well. But the openness will ultimately be appreciated because it gives everyone time to absorb the message and make other plans.

  • Create a game plan. By creating a strategy with clear cut goals and a process of reevaluation you will be left with a greater sense of control and well-being. Basically, you need to determine how your business will operate with a reduced workforce, including how you will spread out the responsibilities among the remaining workers, if your output change or be reduced, and how you plan on using the freed capital to cover expenses?

  • Improve cash flow to spread out or delay layoffs. In some cases, it may be a good idea to try to “comfortably” spread out your employee layoffs or even delay them outright. You could do this by altering your cash flow. If, for example, your business deals with receivables, you may be able access tied up capital by factoring your outstanding bills of sale or applying for a merchant cash advance.

  • Talk to other small business owners. Speaking to others who have experienced what you are going through or who are currently experiencing a similar situation can bring you fresh motivation, insight, and ideas. Either you can speak to any friends and family who own a small business, look up your local SCORE chapter, or join your local chamber of commerce to connect to other business owners. You could also join an online small business community, such as those moderated by the Bank of America,, or Cybershmooze.

Image credit: Notions Capital

Handle With Care: Managing Employees Who Must Wear Multiple Hats

It is common among small businesses that employees learn to become expert jugglers who must successfully manage numerous, often unrelated positions and responsibilities. And as the current economic downturn continues to hinder sales and cut into profit margins, this trend is only getting stronger.

While combining positions may be a necessary step towards conserving capital and riding out the current economic climate, small businesses run the risk of employee burnout, high employee turnover, and a severe drop in productivity.

Thus, it goes without saying, that managing your employees when they must wear multiple hats demands care and caution.

So, here are a few ideas to keep in mind:

  • Make sure the person’s responsibilities are clearly defined. Spell out exactly what your employee is expected to do, and make sure that each duty is fully understood by your employee.

  • Create a mix of responsibilities that is doable. This may take a little fine tuning over time. You need to determine that the workload is not too high and that the positions go together.

  • Try to make it fit the person. The additional responsibilities should be appropriate for the employee’s skills, talents, and personality. Don’t, for example, give an unorganized person a bunch of administrative tasks that demand organization.

  • Be prepared to be flexible. Have in mind that this is a work in progress. You may need to reallocate or redefine your employees’ duties over time.

  • Create an appropriate pay scale. Even though saving money is a priority, it is important that your employees do not feel that you are taking advantage of them by paying them too little. For tips on how to determine an appropriate salary, check out this article.

  • Allow for and encourage feedback. Knowing how your employees are feeling is one of your best indicators of how well the new positions are working out. Make sure to check in with your employees continuously to see how they are managing.

  • Make sure there is downtime. To avoid burnout, make sure that employees have ample break and vacation time.

With the right attitude your employees can stay happy and productive even if they will be working harder.

Image credit: flikr user: Party Pig

High School Students – Admin Labor Option

Call this a pet issue of mine, if you will.  Most articles offering advice for small businesses will suggest hiring college students for administrative tasks.  Now, don’t get me wrong, college students are generally smart, responsible and inexpensive.  However, in my experience High School students can be all of the above. 

 High Schoolers who work are generally extremely motivated – they need the money to keep up with the trends – they need the experience for their resumes and even for their college applications.  The average HS student is more than competent to do filing, record keeping, etc that would otherwise be keeping you up late into the wee hours.  Most of this is work that they could do after school or in the evenings.

Not all HS students are suited to waiting tables or delivering pizza, and not all are suited to bookkeeping or keeping excel files.  Obviously, you need to check them out – ask for a transcript and see what level they are in their studies.  However, I highly recommend checking out this untapped market for admin help.