Trouble Making Payroll in a Tough Economy – Could Vacations be the Answer

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Making payroll is always a top priority. But for many companies during the economic difficulties of the last few years, payroll has been an ongoing concern every pay period. Creativity and loyalty to staff members has given many company leaders the incentive to find alternative ways to make payroll, rather than laying off valuable, dependable workers.

In October 2008 the Society for Human Resource Management (SHRM) conducted a survey that examined paid leave policies and practices in the workplace. The survey was intended to help answer questions and propose potential solutions to help businesses stay viable and employees stay engaged and productive while waiting out the tough economy. One question that the SHRM study posed was – Can modified leave policies be alternatives to layoffs?

Over a period of 12 months, SHRM tracked a gradual shift in views on leave benefits. Much of that shift can be attributed to the weakening economy. Supporting work/life balance has historically been the purpose of paid-time off, four-day workweeks, vacation time, sabbaticals and paid-time off banks. As the recession began to deepen, companies began to consider many of these customary benefits as viable methods to avoid layoffs and survive the weak economy.

Many employers began to look for alternatives to layoffs whenever another solution was available. A growing understanding of the negative consequences on overall morale, productivity, turnover and attitude began to be recognized.

In December 2008 a Leadership IQ survey at 318 companies where corporate layoffs had occurred found that 81 percent of the remaining employees said customer service had declined. Another complaint was increased errors and mistakes and 64 percent said their colleagues’ productivity had declined.

To avoid layoffs companies have begun to ask employees to use all vacation time and reduce working hours. They have also offered job sharing and unpaid sabbaticals as options. And employers continue to make use of the shorter workweek option which can have an impact on how employees take vacation and use their leave benefits.

Payroll is often a company’s largest expense. It is also often the heart of many companies. Many argue that an organization is only as good as the people who work there. Finding creative methods to keep Americans working and companies viable is part of the American spirit of ingenuity.

If you need help with your small business or with payroll services call the experts at DirectPay Payroll Services. DirectPay is a full service payroll, tax filing and HR company. Contact DirectPay today at 704-921-2730 or visit their website at www.directpaypayroll.com to find how you can get help with your business.

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