Here’s an article from CNN Money Same Job, Less Pay that talks about ways that companies are saving money and jobs by cutting staff salaries to weather the economic turmoil.
This is an interesting proposition. When it comes to layoffs the pain involved depends upon how lean your company is running. If you continually work to eliminate your worst performers it can be extremely difficult to identify candidates to layoff. When you have a group of solid contributors how do you identify who to cut? As a manager I would much rather not have to make that choice, although I have had a bit of experience doing just that during the dot-com bust. The company I worked for cut staff repeatedly over a number of years. At the end of it, there were only top performers left.
What I like about this article is that it provides a way to reduce costs and keep key personnel in preparation for the upturn. What it touches on a little bit is the fact that there will be some people in your company who can’t afford the pay cut. They will have to look for a new job. If your top performers are among that set of people, they will be the ones that will have the most impact on your business – and they are also the ones that are most likely to be able to find new jobs when times are tough.
