Saving on personnel costs (without dismissing staff)

For employers who need to cut costs, laying off staff is often the most effective, but least desirable solution. Because employees are usually as indispensable as they are expensive, in this article we list 7 ways in which you can save on personnel costs, without having to compromise on human capital.

  1. Retraining

With the increasing number of companies in dire straits, the government emphasizes that it is desirable that companies participate in a changing (labor) market. After all, entrepreneurs who respond inventively to new developments have a greater chance of survival and make a desirable contribution to the economy. As far as the staff is concerned, changing tasks and retraining is often a prerequisite if you want to continue with the same team in difficult times. The government offers a solution and will meet employees with a subsidy for (re)training as of 2022. Research for whom which form of retraining can be interesting, and read here how you are eligible for the STAP subsidy with which the costs (up to € 1,000 per person per year) can be reimbursed.

  1. Reduction of working hours

If there is temporarily less work, you can save on personnel costs by making use of a reduction in working hours: You can apply for unemployment benefit for employees if you expect to have at least 20% less work for them for a period of 2 to 24 weeks. You apply for a permit for working time allowance from the Ministry of Social Affairs and Employment. You need e-recognition for this. Has the application been granted? Then you can apply for unemployment benefit from the UWV for the hours that your staff does not work.

  1. Healthy working environment

Absenteeism can cost employers dearly. Premiums for sickness absence insurance are expensive and the long-term illness of an uninsured employee can have high financial consequences. Especially if your company is already in dire straits, you want to prevent unforeseen costs from occurring here. With a number of advantageous adjustments in the working environment, you can significantly reduce absenteeism due to illness. For example, greening the workplace, offering the opportunity to move or meditate or appointing a confidential advisor who keeps a finger on the pulse with regard to the ups and downs of employees, pays for itself in the well-being of your staff and therefore: the prosperity of your company. So put down a large number of plants, encourage a daily walk or set up a quiet room where employees can recharge for fifteen minutes. Small effort, high efficiency.

  1. Working from home

Do you have a company that does not necessarily have to work on location? By allowing employees to work from home (more), you can save on, for example, travel costs and facilities at the workplace. If you structurally have fewer staff on the work floor, this also opens up the possibility of moving into a smaller business space and thus saving on, for example, rental and energy costs. In addition, In addition, as an employer you can obtain tax benefits on costs for staff working from home.

  1. Increase productivity

By ensuring that your workforce is more productive, you can increase the yield of your human capital. A common way to increase productivity in ailing companies is to reduce employees' free time. For example, you can agree (in consultation with staff and/or trade unions) that breaks are shortened, days off are not taken and work-related activities such as training and meetings outside working hours. Another strategy is not to limit free time, but to increase effectiveness during the usual working hours. You can achieve this by automating, but such a financial investment probably does not work out well now. Setting targets with the staff can yield good results. If you show what result is needed to become financially healthy again, and all step up a gear to achieve this result, you can turn the tide in a positive, energetic way. A can-do mindset invites staff to bring out the best in themselves.

  1. Austerity

It may be an open door, but saving on personnel costs can easily be done by tightening the belt and limiting extras. By cheaper company cars, traveling second class by train or plane, or by skipping expensive training, hotel stays and company lunches, replacing company assets less quickly, leaving staff outings and serving a less luxurious range of coffee, tea and refreshments, small amounts together can make a big difference. Explain why there is (just) less possible. Goodwill from your employees is unaffordable, especially in more difficult times.

  1. Transparency

Personnel is of most value if they are motivated to make the most of their business. When things are not going so well financially, this can lead to tension in the workplace. Prevent stress, harsh measures, and short fuses at managerial level from reflecting negatively on employees. By explaining that everyone must step up their game for the viability of the company and set a good example, you create intrinsic motivation to contribute. This benefits both the atmosphere and productivity more than an unspoken, but palpable increased pressure on the staff.

Find out more

Do you want to read more about ways to save costs as an entrepreneur? These tax benefits can contribute to a financially healthy company. Do you still have to lay off staff?  Here  you can read more about the steps you need to take. For questions about personnel (costs) or further information about saving, we at Salupa are happy to be of service. Feel free to contact us!