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Ways to Manage Surplus Labor

No matter how established the industry or businesses, there comes a time when some game-changing decisions need to be taken. The surplus of skilled labor is one of the many examples where business owners are bound to take some steps to overcome the challenges, otherwise, it simply results in an unnecessary increase in operational costs and reduced profits. Labor surplus is just as problematic as skilled labor shortage.

It is very important for companies to take appropriate decisions when the labor surplus happens. There are several ways to deal with the surplus of labor, but there is no such thing one-size-fits-all because it entirely depends upon the nature of your business and the severity of the situation.

Some of the most common ways to deal with the surplus of labor are discussed below:

  1. Laying Off

Is your company overflowing with labor and there isn’t much work to get done from a lot of people? Well, you might consider laying them off. However, it is not an ideal solution if the surplus situation is temporary. In this scenario, you could simply give them unpaid leave for a short while and then call them back in for work. Permanent laying off will work best if the situation will never get any better.

  • Pay Cuts

Cutting off a certain amount or percentage from the salary of workers is risky because it directly affects their morale and performance at work. After all, everyone works to pay off their bills and a little out of their passion for the job. However, sometimes pay-cut seems to be the wisest solution to the issue of labor surplus. This decision needs to be taken after a lot of consideration as you could receive a severe backlash from your employees.

  • Retraining

Sometimes the labor surplus issue is only limited to a department or two. In other words, there is just one department that has a lot of skilled labor, but the demand does not match the supply. In this case, you can consider relocating the staff to other departments that are in need of employees. However, you would need to teach new skills and retrain the workers because a new department will probably do not have the same needs as the previous one.

  • Slow Down Hiring Process

You should also consider slowing down the hiring process if there is already labor surplus in your company. Instead of hiring new individuals for the company, train the existing ones to perform other roles. This step is beneficial in a way that it will reduce hiring costs by a huge deal and also save time by not having to screen resumes and conduct interviews for days.

  • Plan Ahead

Plan ahead if you have already predicted labor surplus in your company instead of waiting for the situation to arrive and then take an action. Plan hiring periods accordingly instead of sticking to the schedule you normally follow. Some companies also encourage seasonal hiring to curb labor surplus.

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