Homework Help

Besides employee payroll and employee benefits what are other benefits of reducing...

user profile pic

jennacurtis | Student, Undergraduate | Honors

Posted June 6, 2012 at 1:26 AM via web

dislike 2 like

Besides employee payroll and employee benefits what are other benefits of reducing employment by 10%?

1 Answer | Add Yours

user profile pic

pohnpei397 | College Teacher | (Level 3) Distinguished Educator

Posted June 6, 2012 at 3:10 AM (Answer #1)

dislike 2 like

There are at least two benefits that will be associated with this.

First, productivity will presumably rise.  In order to make the same amount of product with 10% fewer workers, you will need each worker to be more productive.  This will force the firm to become more efficient.  

Second, profits should increase.  If you are making the same amount of product with 10% fewer workers, you should get the same revenue at a lower cost.  Increased profits will make your firm more attractive to investors if that is something that you are interested in.

Thus, cutting employees can have beneficial results other than those directly connected to payroll.

Join to answer this question

Join a community of thousands of dedicated teachers and students.

Join eNotes