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Retaining Employees: Why Cutting Payroll and Reducing Employees Hours Is Not a Solution

The other day, I read an article about cutting payroll and reducing staff, and it can be tempting to cut corners to save money for budget concerns. This approach can have severe consequences for your team and brand. While there are times to cut payroll or lay employees off, it should be the last approach as you eliminate the building blocks that hold your company... the employees. If you are effectively hiring employees, your business should be growing and payroll budgets should be met.


While reading this Eyetastic Blog, think of some poor customer service issues you experienced. Most are due to no one being available to help quickly enough, the long checkout lines, or employees that treat you poorly. More likely than not, you probably never returned to those locations, and they are probably not in business anymore. That is normally due to a company reducing payroll and hours. We are in a different generation; you are not the only optical or business, and you need to do whatever it takes to earn the business and trust of your community, both professionally and personally.


Let us explore the cost of cutting corners and why paying less based on hours is not a sustainable solution for your business. I will also share tips on how to find the right balance between cost-cutting and quality. If you are at the point where you need to cut good employees, meaning that you did everything possible to reduce expenses, you need to reevaluate your strategies and leaders, as the problem is probably right there. Of course, if there is an employee that is not pulling their weight or needs improvement, that is different from cutting hours based on budget concerns, and is a topic for another day 😊


The Problem with Cutting Corners

Cutting corners can take many different forms in a business setting. It could mean hiring cheap labor, using inexpensive materials, or skipping necessary steps in a process. Whatever the case, the underlying motivation is usually the same: to save money. Yet, when it comes to employees, the most significant investment (remember how employees are investments) to build your brand is always the first to cut.


The pandemic showed us how unimportant employees are to businesses; ironically, the employees are the ones to build your business. They are the ones that represent your culture and are the face of the company. While this approach may seem like a good idea in the short term, it can have severe consequences in the long run. You may be sacrificing the employees' quality, productivity, and morale by cutting corners. In addition, you may be damaging your brand's reputation and customer satisfaction. We all know the expression that you get what you pay for.


Why Paying Less Can Lead to Poor Results

One of the main reasons why cutting corners can be a problem is that it often leads to a tradeoff between quantity and quality. When you cut hours, you are likely to get less in quality. This can lead to poor results in terms of your products, customer service, and overall brand reputation. Think of an employee that had 10 hours a week cut, they are picking up on slack, grumpy, and probably looking for another job. Do you think at this point, they care about whether customer needs are being met? Probably not.


While you may save money upfront when you cut corners, you will likely pay a higher price later. For example, if you use cheap materials in your products, you may have a high rate of defects or returns. So what happens with employees who have their hours cut or been laid off? This is what it will cost you:

  • Lack of morale among employees

  • High turnover

  • Lower sales

  • Additional production costs

  • Decrease in productivity

  • Damaged brand

  • Customer dissatisfaction

  • Weak culture

These issues can be difficult to recover from and may cost you more in the long run than investing in quality upfront.


How to Make Smart Decisions for Your Team and Your Brand

Finding the right balance between cost-cutting and quality is essential for a successful business. To make intelligent decisions for your team and your brand, you should consider the following factors:

  • Will the cost-cutting measure sacrifice quality in any way?

  • Will the measure harm your employees?

  • Will the action damage your brand in any way?

  • Will the measure lead to significant long-term benefits for your business?

  • Is this employee good for my business?

While cutting corners may seem like an excellent way to save money in the short term, it can have severe consequences for your team and brand. By investing in quality materials, training, and employee benefits, you are likely to see higher productivity, lower turnover, and better overall results. Build a strong brand reputation and customer loyalty by providing high-quality employees, products, and services. So, before you cut corners, consider the actual cost and prioritize quality over short-term savings.


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