As employers struggle in the most challenging economic climate the United States has seen since the Great Depression, they face difficult cost-cutting decisions on a daily basis in an effort to survive. Most common among those decisions is whether an employer should reduce its work force to minimize costs. It seems as if not a day goes by without employers from various business sectors deciding to reduce their work force by tens, hundreds or even thousands of employees in order to avoid having to close their doors forever.
While a work force reduction certainly is an alternative for many employers, it is an unpleasant option that takes an economic and emotional toll both on employers and employees. Work force reductions often require an employer to provide employees with notice periods required by statute, contract or business needs. In addition, employers are often required to expend a significant amount of money in severance payments to employees who are included in the work force reduction. An employer may be forced to spend considerable amounts in legal fees to make sure that the work force reduction is conducted in accordance with applicable employment laws. Furthermore, work force reductions can significantly damage employee morale as employees see trusted co-workers and friends lose their jobs and begin to worry about the security of their own positions with the company.
Employers should understand that, even in this economic climate, there are alternatives to work force reductions. Many of these options allow employers to accomplish some or all of their economic goals without taking a measure as extreme as reducing their work force.
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