Layoffs Only as a Last Resort

We all know home health care is under attack. There are ever-changing reimbursement schemes, increased competition from nontraditional health care providers, accreditation and competitive bidding. Throw in a little headline-grabbing fraud and Medicare/Medicaid mismanagement and … well, things are a wreck.

The situation has every home medical equipment provider, from the smallest to the largest, searching for ways to gain control of their business. Of course, many are looking to reduce costs — and without a doubt, the quickest and most dramatic means of reducing costs is to eliminate staff.

For more than two decades now, layoffs have been a commonplace tactic for giant companies in all industries, and health care is no exception. While immediately effective, it is a most gut-wrenching and unethical breach of the work contract. Why?

It means an employee, in spite of having done his job and everything asked of him, is going to be receiving his last paycheck. The repercussions are evident. We have a whole generation of workers who have zero loyalty to employers because they have seen a parent, spouse or friend laid off, or have experienced firsthand this terrible practice.

Consider the Alternatives First

A layoff is a visible sign that, for whatever reasons, owners, executives and managers have lost or given-up the battle for creativity, innovation, improvement, fiscal excellence and overall strategic leadership to keep the business prospering.

In lieu of, or at least in an attempt to stave off a layoff maneuver, first make sure you have explored these alternatives:

• Reducing individual employee hours.

• Reducing employees' immediate pay with the promise of a “recovery bonus” once things turn around. (Realize, however, there could be severe legal ramifications if every good faith effort isn't made to honor such an arrangement.)

• Seeking longer payment terms from vendors in order to conserve cash flow.

• Seeking credit line increases from lender relationships.

• Seeking outside investors.

• Subletting space for added revenue generation.

• Holding a sale on high-inventory/low-turn items to generate revenue.

• Readjusting marketing efforts toward higher-profit items.

• Increasing over-the-counter retail sales and using specials to attract both new and repeat customers.