As Pro-Temp Inc. grapples with its slowest period in eight years, co-owner Cal Van Hemert has started snipping away at expenses at the heating, cooling and refrigeration service company in Holland, Mich.
He replaced the company's formal holiday dinner with a pizza lunch, restructured to get more people into the profitable sales department and is debating whether to trim benefits for his 14 employees.
But Van Hemert is keeping layoffs out of his cost-cutting equation. The last time he let workers go was more than a year ago -- and he hired all of them back within three weeks.
So the employees are doing their part, voluntarily cutting their hours from 45 a week to around 30 and fixing service trucks on slow days.
"Business has crashed, but it's not the employees' fault, so we try to protect them," Van Hemert said. "If you send a guy home the first second there's nothing to do, you're going to wreck your company, its reputation and the attitude of everyone who works there."
With 62,000 jobs lost nationwide in June and anxiety about layoffs growing, many employers are getting creative before pulling out the pink slips. They're cutting overtime, getting rid of the office cleaning service and slashing executive perks before sending loyal workers out into a very uncertain job market.
"We're at a time for many businesses right now where it doesn't look like there's going to be a turnaround," said John A. Challenger, chief executive of Chicago-based employment consulting firm Challenger, Gray & Christmas Inc. "So they're now taking a hard look at what they need to do, short of layoffs, in this period of hunkering down and battening down the hatches."
Many employees have years of institutional knowledge, which makes them difficult to replace, experts said.
"It costs a lot to let someone go," said Don McNamara, president of management consulting firm Heritage Associates Inc. in Laguna Niguel. "So we've got to circle the wagons and pull in a little bit."
Businesses can cross-train workers in multiple roles to boost productivity and can restructure to remove inefficiencies, he said. Executives should "get out and start stumping with the rank and file and looking for more business."
Employees, meanwhile, are agreeing to sabbaticals, unpaid vacations, lowered salaries and work furloughs -- also known as temporary layoffs -- in order to avoid the real thing. Discount carrier AirTran Holdings Inc. said this week that it would cut wages 5% to 15% to reduce costs amid record fuel prices.
