Posted on: Monday, September 10, 2001

Companies pursue layoff alternatives

USA Today

When it comes to saving money, a number of employers are trying increasingly creative approaches aimed at averting layoffs.

Forget about traditional methods such as hiring freezes and reduced travel budgets. Here are what some employers are trying:

• Sharing employees. Some companies that have workers but not enough work are sharing their hires with other companies in need of staff.

• Consolidating offices. To reduce real estate costs, some firms are closing offices or merging them. CMF&Z, a Des Moines, Iowa-based advertising and marketing firm, is looking at combining two branches to save money.

• Stock options instead of pay. Acxiom, a Little Rock-based database-management firm, mandated a pay cut of 5 percent for most employees in exchange for stock options. They also offered more options to workers who voluntarily took up to 15 percent more of a reduction, a cut that more than 35 percent of employees opted to take.

• Paying workers to leave. Some firms are giving workers a stipend or reduced salary for helping nonprofits or other firms. Venture Law Group, for example, is giving a stipend of $3,500 a month to lawyers who take a public service sector job for a year.

Other approaches: moving from weekly to biweekly paychecks to save administrative costs; getting rid of 411 information services for employees; and letting employees take time off to work for another firm.

About half of all companies are exploring ways to reduce operating costs to avoid losing employees, according to a July survey by information technology consulting firm Cutter Consortium. The survey of IT managers found that more than 40 percent agreed that temporary pay reductions and shorter workweeks were possible alternatives.