Before you Cut Profits and yes, losses are part of the reality of running a business. Losses can be blamed on a variety of uncontrollable factors, such as economic downturns, competition, seasonal products, and negative reviews. Cutting staffing hours and lay-offs may seem logical, but is it the best approach? Hasty Decisions are Rarely Productive When the profit line begins to decrease, many business owners panic and often react by eliminating positions, merging job duties, decreasing wages or reducing hours. Often, these decisions are made in haste and can negatively affect the long term fiscal health of the business. There is no disputing, certain circumstances may require these strategies; however, they should be a last resort, rather than a defensive maneuver. Avoid Merging Job Responsibilities In a misguided attempt to cut costs, merging job responsibilities has become common practice. It is imperative that businesses recognize and analyze the benefits of certain skill sets, experience and productivity of each employee, before implementing such drastic cost cutting measures. Recognize Employee Value Employees bring with them distinct and respective talents that may or may not be listed under a computer generated “job description”. Merging job responsibilities typically means more work for the same pay, which may result in employee "burn-out". Is it worth the risk of losing a great employee to another company, maybe a competitor? Suffice it to say that all jobs are not interchangeable. Employees are your Best Resource for Ideas Business owners should be visible, approachable and open to suggestions. The value of dedicated employees cannot be underestimated. Your employees are your best, in-house resource for ideas and improvements. In today’s business environment, a successful business owner must invest valuable time cultivating and maintaining business relationships with peers and staff, just as they do with clients. A Proactive Approach Reaps Huge Rewards All options must be carefully weighed. A proactive approach serves the best interest of the business, the employees, the morale and the customer base. The Solution There is no "one solution fits all scenario"; however, answering this one simple question may help make the decision easier. “Will the solution I am proposing address this situation from a proactive approach or a reactive state”? If the response is the latter, more evaluation is required.
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