Chapter 2: What Companies Are Doing to Cut Costs and Keep Their Best People

Key Principles

• Companies are putting many innovative initiatives in place to avoid cutting critical business skills. These include across-the-board cost cutting and alternative work arrangements.

• Across-the-board cost cutting reduces the need for layoffs.

• Alternative work arrangements keep people involved with the company and at the same time reduce costs.

Much of this chapter is based on the results of a research study the authors conducted with WorldatWork, the world’s leading not-for-profit professional association dedicated to knowledge leadership in compensation benefits and total rewards, to determine how companies cope with cost-cutting layoffs and at the same time maintain competitiveness. Specifically, the goal was to discover if companies that resort to mass layoffs also try to maintain their human capital by finding alternatives to layoffs. If they do, is the strategy successful? And are companies attempting to keep critical skills and their best people during a layoff? Here are the results.