Alternative Strategies to Layoffs

According to the Mass Layoff Statistics (MLS) program, year-to-date mass layoff events (21,184) and initial claims (2,162,202) both recorded program highs through August 2009 (www.ow.ly/uQzh). Nonfarm payroll employment continued to decline in September, losing 263,000 jobs, and the unemployment rate - 9.8 percent - continued to trend up (www.ow.ly/uQFs).

What's an employer to do? Maribeth Minella, of Young Conaway Stargatt & Taylor, LLP, suggests thinking creatively:

Thinking creatively has always been a business necessity and in this economic environment it is imperative for companies to come up with new ways to cut labor costs while maintaining a competitive edge.

Ms. Minella notes that there is no single alternative that suits each employer's particular circumstance. A creative organization can put together an "alternative-to-layoff" plan best suited to immediate goals and long-term busienss planning. Ms. Minella discusses three categories of alternatives:

1. low-risk, long term solutions, such as hiring freezes, pay freezes, and other reductions in employee-related expenses such as travel expenses and tuition reimbursements;
2. mid-range solutions, such as job-sharing,reassignment of employees whose skills are better utilized in other areas of departments, and voluntary programs such as early retirement, sabbaticals, and flex-time or part-time schedules;
3. deep impact solutions, such as short term shutdowns, sales of portions of a business, and long term furloughs.

Ms. Minella notes that regardless of which alternative an organization selects, no option is risk-free:

Any labor cost savings measure has the potential to generate employment discrimination claims. Like traditional layoffs, alternatives should be viewed with an eye towards whether the alternative disproportionally impacts one group of employees.

She concludes that alternatives to layoffs are powerful tools that can be used to reinvigorate employees and retain the company's best human capital, in addition to improving the bottom line of the organization.

Ms. Minella's article in its entirety can be found here: http://ow.ly/uR1i