Question

A company currently has too many employees and must address its labor surplus in order to remain financially sound. What is the best strategy to deal with the labor surplus?

a) Implementing temporary pay cuts for employees until the surplus is resolved.
b) Providing employees with additional training and skill development opportunities.
c) Offering voluntary early retirement packages for eligible employees.
d) Instituting a hiring freeze and not filling vacant positions.

Answer 1

The best strategy to deal with a labor surplus in a company is to offer voluntary early retirement packages for eligible employees.

Step-by-step explanation:

The best strategy to deal with a labor surplus in a company is to offer voluntary early retirement packages for eligible employees.

By offering voluntary early retirement packages, the company can reduce its workforce without resorting to layoffs or pay cuts. This approach allows employees who are nearing retirement age or have other career options to voluntarily leave the company, creating opportunities for the company to streamline its operations and reduce costs.

This strategy is advantageous because it avoids negative impacts on employee morale and loyalty, which may occur with pay cuts or forced layoffs. It also helps the company to retain its most skilled and experienced employees, as they are more likely to stay if they have the option to retire early.