Salaries and wages are one of the largest costs of every company, and are often the most difficult to control. But changing compensation is touchy for those who are affected, so it is important to handle the changes with compassion, truth, and firmness.
One way to do this is to identify your key employees and get their commitment to your plans before you implement them. Companies that reduce compensation or fire employees without considering other methods to increase productivity or reduce costs invariably suffer from poor morale, indifferent customer relations, and further declines in sales, potentially falling into a downward spiral from which there is no recovery.
The following tips will lead you through a difficult, though necessary process to ensure your company is positioned to survive and thrive in any economic environment.