There is no stopping the wheels of fortune, whether you’re the little guy or the big corporation. When the financial markets are on a downturn and the economy takes a nosedive, it’s time to look at cutting corners and finding ways to save money any way possible. However, what is a business to do when employees are screaming for pay increases to handle inflation, customers are spending less and expecting the same, if not better quality, and finding banks to lend money for day-to-day functions is almost impossible?
There are many possible solutions to the economic problem, but short of reforming the government, only a few can be handled within the company. From restructuring to accommodate urbanization trends, to utilizing a payroll outsourcing company, there are still a fair number of things to be done to assist in finding the spare funds hidden within a company, but there is no magical one-size fits all cure. Nearly every company in financial need will be required to utilize multiple methods to survive through a recession.
By combining multiple stores, it’s possible to consolidate resources and focus on core markets. This will help to reduce overhead, increase revenue, and drive up profit margins, over a long term. Unfortunately, consolidation is not an instant solution like outsourcing the payroll services department. In reality, it requires time and money to perform demographic and marketing analysis, you will inevitably loose talented employee’s, and as stores are closed, you will loose potential profit to closing sales just to reduce your overstock. The worst-case scenario will find that none of the stores you own is actually in your strongest market, meaning not only a closure, but a grand opening as well.
It is possible to utilize a PEO to handle all of your Human Resource needs; this will provide a level of quality unmatched in your other departments, as you will be hiring a company who specializes in handling HR and payroll services. These companies know the laws and regulations around E Verify, EEO policies, sexual harassment requirements, and required company forms. Many are even able to assist in training documentation for new hires and managing employee benefits.
It’s even possible to downsize your staff, reduce middle management fluff, and streamline processes, but great care must be taken when opting for workforce reduction. If an owner decides to remove workers, they need to determine exactly where redundancy lies, understand how and where to shift workflow, and provide a level of leadership that will inspire the remaining employees to continue offering the highest level of service. Without these key element, a routine downsize could spell true disaster.
Whether deciding to hire a PEO or restructure the organization, there are alternatives to being forced to close the doors or sell the business, but none of them are perfect and each of them require difficult decisions. To survive a financial crisis, the tough decisions become a requirement, but that’s part of the responsibility of being a business owner.