In tough times the most obvious way to immediately cut costs is to make redundancies. However, rushing into this decision could prove costly to your bottom line and ultimately damage your business’s chance of a strong sustained recovery when more prosperous times return. Consider carefully the following 5 pitfalls before doing something you will later regret.

1. Cost and time implications when re-hiring
Good times will return again, they always do; you have to make sure it’s just not you and the
tea boy left! If you retain core staff during difficult times you will be able to respond quickly and decisively when the market makes the shift up. Meanwhile, your competitors will be scrambling to recruit and rushing to bring new employees up to proficient levels.

2. Loss of productivity before, around and even after layoffs.
News of layoffs spreads like wild-fire in companies of all shapes and sizes. The minute the ball is set in motion the damage to morale and productivity is already done. Your staff will spend the time which should be dedicated to servicing the needs of loyal clients with debates on who will be next into the board room.

3. Damage to brand and reputation
In spite of the recession many business still pride themselves as being the “employer of choice”. The quest to attract top talent to your business has only been interrupted by the recession. Will making layoffs effect your standing within your business field, and affect your ability to attract the right talent when times get better?

4. Would be leaders are cut down in their prime.
Before layoffs consider that a future MD of your company might be the one facing the axe. Banking and electrical industries that made heavy layoffs in the 80’s are now having difficulty in finding talent to take the helm. Don’t be short-sighted and throw a diamond in the rough back onto the job market.

5. The survivors still suffer.
The additional stress placed on the survivors may increase incidents of medical issues and sick days. With morale damaged and an increased workload on those who remain. Some may experience psychological or stress related illnesses or may even resort to substance or alcohol abuse.

Consider the 5 above points and you may conclude that entertaining the possibility of layoffs might actually be the biggest mistake of your business career.

Mr Anthony Hartley Denton is author of the popular eBook ‘The Diamond Principles’ Coal face case studies to recession proof your business & survive a downturn.

Click to http://www.the-diamond-principles.com for more information and your free chapter sample.

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