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Sure-Fire Ways to Reduce Your Labor Costs
by Randall Clark
September 7, 2005

Follow just a few of the ideas detailed below, and you can reduce your work force by 15-35% over the next 12-18 months. 

Several recent studies show that anywhere from 15% to 35% of the "employed" workforce is “actively looking” for a new job.  “Actively looking” is defined as taking proactive steps such as applying for a job, updating a resume, posting a resume to a job board, etc. 

If this statistic is true, odds are that some of these “active lookers” work for you.  Why not help them out?

Here are some ideas to encourage those "lookers" to move along: 

  1. Make your self inaccessible to your employees
  2. Make it as difficult as possible to move around in your company
  3. Delay the “annual review” process as long as possible
  4. Make your incentive plan more confusing
  5. Wait until employees actually resign before you offer a meaningful pay raise
  6. Make your employees complete extra paper or computer work to document everything they do

Sarcasm?

emphatically....YES

The past few years have blessed us with a relatively plentiful labor market and thus employees have tolerated nominal salary increases and cheerfully accepted increased workloads.  Low employee turnover has given managers a false sense that they have created a great place to work. 

Things are about to change. 

What will your manager or board think about your leadership abilities if 15-35% of your team leave this year? 

As the Georgia economy regains momentum, you are at risk of a serious degradation of your human capital - right when it could benefit you the most. 

Here are a couple of real suggestions: 

  1. Revaluate every employee’s pay and proactively increase any that are paid below market
  2. Create an environment where employees will come to you first and talk before they “actively look” for a new job
  3. Create a contingency plan - how you will function if 10%, 20% or 30% of your employees walk out
  4. Proactively add some depth to your team to strengthen your position. 

The unplanned loss of employees costs more than money. 

It causes a loss of momentum and with it the loss of morale.  It puts you in a reactionary mode, it dilutes your company’s culture, it chips away at your ability to lead, and ultimately compromises your company's will to win.




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