Reducing Costs to Prevent Layoffs in 2024

As 2024 gets underway, businesses are preparing for changes to their bottom line. Unfortunately, many times this comes with reductions in force by not replacing employees who leave or, even worse, layoffs.

However, with enough advanced planning, your company might be able to prevent downsizing or asking employees to do the same (or more) with less. 

Cutting and watching costs no matter whether the current economy is good or bad should always be a priority for a company. These are six ways you can effectively cut costs. While some appear to cost money, the end result could save you and be a positive return on your investment.

Invest in New Technology

While there can be startup costs for technology investments, new technology enables employers to automate manual processes and reduce human error. Good examples of new technology include software to manage your database, human resources management platforms, artificial intelligence, online or software training programs, and more. 

If your business is in a position where you can afford (from a workload perspective) to not replace someone who has left, opting for software can be a viable option. For example, a platform like PeopleStrategy can manage multiple facets of your business like payroll and benefits. It still requires a human resource employee on your team to operate, but the efficiencies gained in reduced time to run payroll, monitor time entry, and more can show an ROI and reduction in spend quickly. 

Improve Employee Retention

Those technologies also play a part in giving employees the tools they need to do their jobs efficiently, which is a leading factor in improving employee retention. Making sure they have what they need to do their job and that they feel supported will keep them from looking at other places. 

Additionally, a company can provide more opportunities for career advancement (again utilizing new online or digital training programs), work with a benefits provider or administrator to streamline offerings to exactly what employees want and improve overall workplace culture. Doing so through employee feedback and flexibility will increase morale. In addition, that allows you the chance to be transparent with employees to help them understand decisions being made throughout the company. 

Manage Health Care Costs

We just talked about managing benefits, and that includes healthcare costs. Reevaluating plans and offerings to make sure you are providing the right mix is important to do every year. Planning ahead and doing this as early as possible should be a regular part of your job duties. Leverage your relationship with your broker or benefits administrator to see what kind of cost-saving solutions they can help you provide employees (and your contributions as well).

Embrace Outsourcing

If using digital resources is not an option for your organization, consider utilizing outside help. Many times tasks like payroll and benefits administration can be performed in a smooth or faster manner by an outside organization. For example, utilizing the PeopleStrategy platform to cover payroll, training, time management, and benefits can be more cost-effective than hiring employees in those roles.

Consider Flexible Work Arrangements

Depending on your company’s purpose, moving to a hybrid or remote work option could save you money. By reducing overhead expenses you could save thousands of dollars in rent, utilities, cleaning costs, and more. Additionally, flexible scheduling such as additional leave or paid time off can lower overhead, while coworking arrangements can reduce costs (depending on your organization’s purpose).

Review Expenses

While finance and or accounting departments in your business should be keeping a close eye on accounts payable, regular reviews of all expenses should be completed. Reviewing expenses regularly and relying on long-standing relationships can help build trust and potentially offer additional savings such as reduced fees, improved rates, and additional services. If you think of these folks as strategic partners, you could be pleased with the results.

What to Know If You Must Lay Off Employees

Even if after employing all of those cost-saving measures reductions in force still are necessary,  you need to apply a strategic approach to downsizing. There are many complexities involved as well as potential risks not only that involve employees you are letting go, but also how to proactively address situations with retained employees.

Alternatives to layoffs include job sharing, furloughs, reductions in pay, adjustments to benefits or perks, hiring freezes, utilizing contract or temporary employees, shortened work weeks, voluntary separation or early retirement programs, and elimination of high-class travel or employee meals are other options.

If you utilize any and exhaust all of those options and additional layoffs are required, employers must be confident in their approach to choosing which employees to lay off. 

Simply going by seniority, employee status, merit, or skills is not cut and dried. It’s likely a combination of criteria that will make your most effective approach. If your organization has multiple locations, this could impact employees at different places, and in different roles and lead to a cascading effect of things such as additional liquidation of assets.


As you go through the start of 2024, hopefully, you will be able to reduce expenses in ways that will not affect employee status. Consulting with a service such as PeopleStrategy is a way not only to trim costs and be more efficient but also can support you through these tough decisions. There are many other ways that you can start to prepare for a potential recession or overall change in the economy. Download our free Employer’s Guide to Navigating a Recession to make sure you are fully prepared.