Focus

During the current recession, I doubt there's a company—small or large—that hasn't contemplated laying off employees. And in the roofing industry, where skilled workers are hard enough to find, the decision to let employees go can be particularly painful if you know you'll have a difficult time finding such employees when the economy improves.

According to a recent BusinessWeek article, salaries and wages typically account for 60 to 80 percent of a small company's expenses. Such figures make it difficult to avoid considering layoffs as a cost-cutting measure.

But in most cases, layoffs are a last resort: Employers start shedding employees after all other cuts have been made, such as nonessential travel, office perks such as free coffee, and postponement of big-ticket purchases.

But there may be other expenses you can cut that you haven't yet considered. During a recession, most employees are grateful to be employed and would rather sacrifice something in the short term to ensure their jobs remain intact. So making deep cuts without losing employees may be an option.

For example, some employees may be willing to take voluntary unpaid leave for a few months. Or consider a wage decrease for all employees, including yourself. If you contribute funds to employees' retirement plans, you could consider temporarily decreasing the amount you contribute. In addition, some employees may be willing to retire early or permanently reduce their hours to improve their work-life balance.

A tactic that worked for many employers interviewed by BusinessWeek was to involve employees directly in the process. In small companies, employer-employee relationships tend to be close, and employees likely will appreciate your honesty and willingness to share information. If you were to meet with your employees, explain the company's financial situation and ask for their help devising cost-cutting solutions, you may be surprised by what they are willing to sacrifice to keep their jobs.

Involving employees in the process also gives them a vested interest in the decisions that are made, and the tough choices you have to make become a little easier because employees understand the reasons behind them.

Ambika Puniani Bailey is editor of Professional Roofing and NRCA's senior director of communications.