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Amy Campbell

Amy Campbell
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acampbell@vpico.com

Employee Cutbacks: Where Do You Draw the Line?

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When money gets tight, the first thing most people do is cut back in one area or another. Unfortunately, for business owners, that could mean laying off employees, cutting work hours or trimming salaries. We’re seeing this across the country—in big business and small retailers, plus city and state departments including police forces. Every business, it seems, is trying to make do with less.

Of course, there will be fallout from these actions. The job of two employees now becomes the responsibility of one, which can lead to employee burnout, increased errors and less creativity. In the government sector, street and highway improvements will take longer as fewer people are performing the work, there may not be as many police officers or firefighters available, and other city offices, like utilities and courts, will also be affected.

Lines get longer at grocery and convenience stores. Retail hours may be limited due to fewer employees available to man the store. Theft may increase, also. So where do you draw the line between saving money and potentially hurting your business?

There’s a hot thread brewing on Self-Storage Talk about employee cutbacks. SST member BeachBoy asked if others in the industry have experienced cuts in salary or working hours. SST member Reebee writes her office staff was cut from six to just one over the past two years. Others wonder if there’s bad news just around the corner.

Another point of concern many employees have is if a business has adapted to having one employee do the work of two, why change? SST member alexlekas points this out in his post: “Lot of companies laid people off early on and many have figured out how to do the same, or even more, with fewer people.”

If business has slowed, of course reducing staff can be a money-saver and even a necessity. However, once business picks up, owners need to realize one employee may not be able to handle the workload. Being open and honest about staffing is critical. If customers become irate over mistakes, wait in long lines for customer service or if the facility’s upkeep begins to suffer, you’re doing more harm than good. Sure, you may be saving a few bucks now, but you may lose tenants, which will hurt you in the end.

I’m sure there are very few business owners out there who become gleeful at the thought of trimming salaries. If you’ve been forced to reduce your employees’ paycheck—either by dollar amount or hours worked—try to make it a short-term solution while you look for other cost-saving measures. To take the sting out, consider offering bonuses for new business, increasing benefits or even giving employees a gift card here and there.

Most employees understand you’re running a business in a tough economy. They get that occupancies have dropped and revenue may be suffering. Just remember, your employees have to make a living, too.

Have you decreased staff  or work hours? Give us your two cents on the topic by posting a comment below or join the discussion at Self-Storage Talk.

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