By Perminus Wainaina
This year has been tough on businesses. Just when companies were about to recover from the effects of COVID, the economy slowed down. It is time to make tough decisions to continue thriving, and this is by managing staff costs. To avoid making mistakes, here are some of the things a company can do to manage staff costs.
Review your staffing levels and pay
Look at your current workforce and assess whether you have the correct number of employees to meet your business needs. If you have more than you need, consider reducing your workforce. In the last two months, we have helped a company in the manufacturing industry conduct redundancies in a legal manner.
Moreover, if you pay above the market rate, you can adjust to match the market rate. Additionally, if you raise salaries after a particular time, you can review depending on how the company performs in the year.
You can also consider converting salaries into commission. For instance, a salesperson may be willing to accept a higher commission with a lower gross salary. However, remember to have an honest conversation with your employees. Ensure to follow the right process, and comply with the Kenyan Labour Laws.
Reduce employee benefits
This may include cutting back on extra bonuses, allowances, company-sponsored contributions, free lunches, parties, and other monetary awards employees enjoy. For those that deal with suppliers, you could explore different plans with better prices.
Prioritize upskilling your employee
You may look at this as an additional cost, but look at it this way; your organization needs diverse employees who can adapt to the new working methods, especially during change. You want them to have strong skills to protect the business’s success. And especially in skills that you need to get new customers and retain customers.
For instance, we recently supported a company in real estate by offering a sales training, customer service and leadership training. This was to ensure their staff had the skills to close business, retain their clients and ensure their managers/supervisor lead and manage better.
Reduce office costs
Covid has shown that it is possible to work from home which can help reduce your cost. If going fully remote isn’t an option for your company, you can consider reducing your office space and allowing some people to work from home in shifts. This can help you save on fixed overhead costs, including rent, heating, and support staff.
In conclusion: Managing staff costs during tough times requires careful planning and a willingness to make difficult decisions. Some changes may not be permanent and can allow you to resume normal after some time, while others may be indefinite.
Whatever it may be, remember to communicate and extend empathy during the process to ensure the work environment remains positive and productive.
Writer is the CEO at Corporate Staffing Services