Your business is struggling and cash flow is tight. You can see the light at the end of a tunnel but can you get there. You know you need to free up some cash but the real question is how.
Some businesses choose to lay off their staff and reduce their overhead. Others may look for additional funding.
Here is a story of a small business who utilized an effective people strategy to save their business.
This business is in a specialized niche in the Aerospace industry. They were on the door step of success and were months away from landing some major accounts.
The Obstacle To Succes
They were in a serious cash flow crunch and were ready to lay off 50% of their work force. Being a specialized IT company in a very specific niche they knew that these employees would not be able to wait for the new contracts. If they lost this expertise they could lose everything.
Instead they got creative.
They worked with us to create a workforce cost analysis that included pay reductions, operating expense reductions, revision to PTO policies, revised bonus, OT and expense policies.
They went to their employees and worked with them. They developed an employee communication strategy to ensure the employees were well-informed of the situation. They also launched a contest for employee suggestions on cost savings.
What were the results?
By implementing all of the cost saving measures this business avoided all of the layoffs. Only 1 employee was moved from full-time to part-time. The projected costs savings was $610,000.
They were awarded the 2 major contracts and part of the reason was their ability to navigate through tough times.
Since then they have seen 20% growth year over year.
Having an effective people strategy that engages your employees is a proven way to business success even in the toughest times.