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Why layoffs may not be the solution during an economic downturn


Layoffs aren't always the answer.

As the manager or business owner in the truck driving industry, you may already be aware of a decline in overall need for trucking. According to The Wall Street Journal, there has been a decline in the need for shipped goods. Whether this is impacting the trucking industry at this point is yet to be determined, as is how long this will last.

Often, during a period of economic downturn or a cut back in business, one of the first responses is to lay off employees. This isn't always the right solution, however.

Employees are a major cost in any workforce, however that must be compared to the cost of turnover and the cost of hiring when things inevitably pick back up. In an industry like trucking, it's unlikely for things to remain negative for long as there's an ever-present need to ship and receive goods all around the country.

Why layoffs aren't always the solution
There are massive costs to rehire and train new employees when things do swing upward once again. There will be missed profits as you're caught scrambling to get enough people working to run the business efficiently again.

This same sentiment can hold true when it comes to truck driving. Even if things do slow down for a period, eventually you will need drivers and in an industry famously facing shortages, you are probably well aware of how costly those shortages can be. Not having the manpower to make business happen when it picks up is a surefire way to make sure you miss out on potential business.

Not only that, but employees have intangibles that would be hard to replace, such as the training they have and the networks they've built while on the job. Those are both valuable and need to be considered against the cost of keeping them on payroll.

Harvard Business Review states, "Layoffs are so embedded in business as a short-term solution for lowering costs that managers ignore the fact that they create more problems than they solve."

Alternatives to layoffs
There is no doubt that in some cases, layoffs are inevitable. This varies from business to business and situation to situation. However, there are some steps that can be taken before things get to that point that can hopefully deter or eliminate the need for layoffs.

Cutting employees expenses and even reducing pay or benefits means you can keep some employees on while cutting costs. This way, they're available when things pick up again. Of course, not all employees will be happy with this but others will be grateful for that in place of being laid off. Negotiations vendor expenses and costs can also help bring down the need for layoffs.

Another solution is using a staffing agency. By using a staffing agency and temporary employees, you use the agency to hire based on need. As need fluctuates, so can the number of employees you bring in. While these are temporary workers, it can be beneficial when your company faces a lot of ups and downs when it comes to the volume of business.

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