What does it take to have no layoffs in 20 years? Employee commitment!

As AGM celebrated its 20-year anniversary without a layoff, one might ask:  What does it take for a company to avoid a layoff? Commitment to employees and a well-developed plan is what it takes.

Last month, we talked about the history behind our 20-year layoff dry spell. This month, we’ll share with you the plan that got AGM there.

1. Only hire employees when Management can see a long-term demand for the employee’s services. Otherwise, use voluntary or compulsory overtime to avoid hiring new employees that would possibly need to be laid off in the event of a downturn.
2. Cross-train employees so that if a specific product line or department is slow, employees can be moved to another product line or department for as long as necessary.
3. Continually communicate with employees of the projected downturn so employees can better prepare themselves psychologically and financially.
4. Implement a hiring freeze on all non-essential positions whenever Management forecasts a significant downturn.
5. For essential positions, consider hiring from within.
6. Keep a backlog of thousands of hours of low-priority, long-term projects to help keep employees busy during downturns.
7. Increase inventories of standard product components during downturns so that AGM’s hourly production employees can stay busy making sub-assemblies, even when there are no orders, which would justify this build-up.
8. Perform comprehensive inventory counts.
9. Utilize current employees to take over contracted services, such as janitorial and grounds-keeping duties.
10. Utilize production employees to do non-routine tasks, such as painting, roof-coating, paving, and deep cleaning.
11. Consider implementing a wage and salary freeze until better times resume.
12. Encourage employees to take vacation days during these downturns and, if needed, even pay employees bonuses to use up their vacation days.
13. Have employees take Voluntary or Involuntary Unpaid Leaves of Absence to help the company temporarily reduce fixed labor costs. Especially consider highly-compensated non-essential salary employees for these unpaid absences as they likely have more savings, thus, more able to deal with a loss of income. Plus, the company gets a bigger bang for the buck.

There’s no true secret to this success. It takes a lot of planning, understanding that there are other options, and employee commitment that is so unstirred that it becomes part of corporate culture.