Downsizing/position elimination
thompson
11 Posts
The company is downsizing. In an effort to reduce costs there is discussion regarding the elimination of certain positions within a class of employees. The work can be done by another class of employees. Employee morale will be quite low when this occurs. There has been talk about keeping those proposed eliminated position employees if they would agree to a pay cut at the same level as those employees who would start performing those duties. Though it would be a 50%+ reduction in pay, I wonder it it would be better to offer them positions at the reduced pay rate verses eliminating those positions altogether. It might save us from having to develop a plan to determine why these positions were chosen. Additionally, if the employees don't like it, they can leave on their own. I wanted to hear what some of you think. Thanks.
Comments
Personally, I think it is better to offer reduced pay rather than no job at all. However, I would be looking at a pay reduction for more than a targeted few. Even if you are eliminating a line of business, your other overhead expenses go across the board and are not reduced. Therefore it makes sense to do a small amount for everyone, even if you do a larger amount for a specific group.
FYI: If your employees have to take a 50% pay cut thier voluntary terminations will not be treated as voluntary by legal authorities such as your local unemployment office.
Good luck!
Nae