Expert Advises Firms on Cost-saving Measures
The Managing Partner at HR-EX Consulting, Enitan Oyenuga, has advised organisations and operators of businesses to adopt cost-saving measures in view of the disruptions caused by the COVID-19 pandemic.
Oyenuga, who disclosed this in a statement, anticipated rise in the cost of operations of small businesses.
She maintained that working with a group of small business, it was discovered that there are actions small businesses are taking to minimise the impact of these changes and safeguard the future of their businesses, “I do hope these ideas will help you land on a solution that works for your own business.”
Oyenuga further explained that in the light of the national lockdown to combat the spread of COVID-19, a number of companies had started cutting down wages of their workforce.
She noted that with large cuts at leadership levels and graduated percentage reduction below the management team; it has been observed that leadership, “in some of the worse hit sectors completely foregoing their salary, implementing up to 50 per cent pay cut for management level employees and 30-25 per cent for the rest of the organisation.”
She affirmed that in implementing a salary cut, organisations must ensure no one was paid below the minimum wage, communicate a timeframe for the pay reduction, exempt low-wage employees, get the employees’ consent prior to effecting the change and others.
According to her, “In addition, with replacement cost valued at about 33 per cent of annual salary for the role, unpaid leave means a savings in recruitment and on-boarding costs when business as usual resumes, allowing for employees to easily pick up from where they left off.
“If you decide on mandatory unpaid leave, consider how to figure out your critical staffing for the period. You may want to consider the work that is required, work schedule or rosters, existing performance data performance and skills required during this period.
“Engage them on the need to cover the reduced workload. Engage and inform all employees on the change (the alternative being employee layoffs). Communicate a timeframe for the unpaid leave period. Get the employee’s consent prior to effecting the change. If the situation is likely to continue after the set period, inform well in advance.”