When the budget has to be cut, it is the responsibility of managers to make those often unpopular decisions. Business management experts like Eyal Gutentag stress that knowing how to negotiate, being creative and understanding the cultural and demographic makeup of their workforce is very important when faced with budget cuts and staff reductions.
Having a good rapport with employees will go a long way toward meaningful negotiations when they are necessary. If you have taken the time to build a trusting relationship with the people who work for you, they will trust you when it comes time to make difficult decisions. Being willing to give as well as take is important, too. If the employees see that you are feeling the effects of a business downturn as well, they might be more cooperative when it comes to reductions in hours, benefits or pay.
Creative Problem Solving
Looking at budget cuts in a creative way can help save the company and maintain morale among employees. Be sure to be open and honest with the workforce. People pick up on the vibe if information is being withheld and that will work against you. If you have to make cuts in staff, consider job sharing among current employees or sharing workers with another company. This keeps people employed and you don’t lose well-trained employees
Younger workers look at the work/life balance differently today than older generations did. In the event of budget reductions, they might be willing to work from home, which has its benefits for companies and staff. Be careful that you are also taking the gender and racial makeup of the company into account when making your decisions. You need to consider the optics when making these decisions, as well.
Dealing with budget cuts during lean times isn’t fun for anyone, but if you have taken the time to build a relationship with your employees, it might be easier for you to navigate.