Words by Ange Connor, Director Inspire HQ
As the cost of living rises, and the economy slows down, many tourism and hospitality businesses are starting to explore ways to manage and reduce costs.
During a downturn in business, one of the crucial areas to focus on is your workforce. Reduced work volumes may lead to a situation where there isn’t enough work for all employees, making labour costs a significant expense.
While it might feel like the thing to do is rip that Band-Aid off and take swift action by letting people go, there are other options to consider to help reduce costs. Seeking advice from an expert, such as a human resources consultant or your accountant may be a good starting point.
As a Tourism Midwest Victoria Industry Partner, you can access up to four hours of one-on-one HR support.
Whether you need assistance with restructuring your workforce, managing wages, seeking advice on industry award rates or employment contracts, this service can be tailored to meet your unique business needs.
Ange’s top three tips for managing your workforce and reducing costs during a downturn in business
1. Cost modelling and needs analysis
Really understanding your workforce makeup is key. Consider the mix of full-time, part-time and casual employees and these costs per hour, as well as the resourcing required on each shift (mix of management/supervisors/team members).
Forecasting revenue and wages for the months ahead will help your business better understand your employee costs. Once you know your projections, we can then look at options for re-modelling your workforce.
Could your roster or workforce makeup be structured more efficiently? Could you eliminate or reduce overtime costs? Are minimum hours and split shift penalties costing you when we could roster people differently to reduce these costs?
Sometimes, because we have done something a particular way for so long, it can be hard to think differently. So, it can be valuable to work with someone independent to help consider different options.
2. Legal obligations
Making significant changes in the workplace – including restructuring, changing the pattern of work, hours of work or making employees redundant – requires you to comply with legislation.
At a minimum, your business must:
- Ensure a thorough consultation process is followed and this process is detailed in the relevant award
- Ensure any action you take comply with the Fair Work Act, the relevant award and the National Employment Standards.
The legal requirements and processes can seem daunting, but getting expert advice will help give you peace of mind and ensure your business does not breach its legal obligations.
3. Communicating with your staff
How much information you share with your employees during a downturn is always a question I get asked.
The answer is… it is different for every business.
Saying nothing at all and not communicating with your employees about what’s happening can sometimes only make matters worse and cause unnecessary stress and pressure for your people.
Sometimes when we communicate as openly as we can with our employees, they may come forward with other options and ideas that might never have been on your radar.
Restructuring and/or redundancy are never easy on those involved. How you lead your team through this kind of change can make or break the business brand and employee engagement.