The Headcount Solution : How to Cut Compensation Costs and Keep Your Best People

Some layoffs will be necessary in almost every situation. The headcount solution does not entirely do away with the need to conduct them. Our solution does, however, minimize their short- and long-term negative impacts. They should be minimized and treated as a last effort rather than the first.

We recommend that you follow these guides to getting the most from layoffs while minimizing negative impacts:

• Be truthful about the inevitability of some layoffs from day one. Don’t lead employees into a false sense of security that the headcount solution will allow us to avoid layoffs.

• Make sure that employees see and experience the steps preceding layoffs. Assure, for example, that all are aware of the across-the-board compensation costs that have been cut — cost-cutting that has saved jobs. Make sure that everyone knows their role in the alternative work arrangements that are deployed.