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Cut Staffing Costs Without Cutting Staff

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in Human Resources,Office Management

Although some pundits say that the economy is starting to turn around, things are still pretty tight for most organizations. Everyone is looking for additional ways to cut costs. Since payroll is the biggest expense in many organizations, it makes sense to direct your attention there.


Here are some ideas that law firms and other companies are successfully using to cut their staffing costs. See if you can adopt one or more of these cost-cutting measures for your organization.

  • Defer start dates: After recruiting the cream of the crop, some law firms are telling new hires they won't be able to start work for six months or a year, often without any pay until the start date. It's a risky move for both parties, though: The deferred hires might very well accept another offer during that time, and the employer might decide, after the waiting period is up, that it can't afford to add any new hires after all and withdraw the job offer altogether. On the other hand, it's a good safety net for new hires, knowing they have a reasonable chance of employment waiting for them while they take advantage of the time off to travel or volunteer, and employers know that, if things pick up economically in a year's time, they've got some qualified new hires on hand, raring to work.

  • Offer reduced-pay sabbaticals: One major law firm reportedly offered certain lawyers the option of taking a one-year sabbatical, during which they would be paid one-third of their regular salary and keep their medical benefits. The firm did not guarantee that these lawyers would definitely be able to return to work at the end of that year, but it left the door open for that possibility. Meanwhile, because the sabbatical was deemed "unrestricted," participants were free to seek employment elsewhere during that time.

  • Prohibit non-exempts from working overtime: Paying workers time-and-a-half quickly adds up to a major expense that is not always necessary for smooth business operations. If overtime is occasionally necessary, make sure workers are required to obtain permission from their manager before working overtime. (Remember, however, that you are required by law to pay workers for time worked, whether or not they received permission first.)

  • Implement furloughs: This seems to be a favorite cost-cutting measure amongst local, state, and federal government agencies.

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