These days, it may seem as though cutting jobs is the quickest way to reduce personnel costs—but some companies are implementing less extreme measures that still significantly curtail expenses.

Times are tough. And when the going gets tough, the tough start laying off workers. At least that’s the common assumption.

But layoffs, in addition to demoralizing an organization’s remaining staff, can also waste the incalculable investment you’ve made in talent and training, particularly if you already run a lean enterprise. Before considering layoffs, it’s useful to examine alternative solutions that may help you reduce your personnel expenses while maintaining—or perhaps even increasing—morale and productivity. Trends such as job-sharing, shorter work weeks, unpaid sabbaticals and secondments have already caught hold in Europe and are gaining popularity in the U.S. as well.

The keys to cutting personnel costs are flexibility and work-life balance. Why the latter? Because workers are increasingly placing value on their free time and may welcome the ability to work fewer hours, even at lower pay. What’s more, studies have shown that when people have greater control over their work hours, they become more productive. Here are a few ways that you can reduce your payroll while offering your employees more options:

Shorter work weeks. Utah is currently experimenting with a four-day, 40-hour work week for its state employees in an attempt to save energy costs and reduce rush-hour traffic. By contrast, you could offer four eight-hour days to some or all of your employees (especially if they are hourly workers), either by closing one day a week or varying days off.

Sabbaticals. American workers take far less vacation time than those in most other industrialized nations. Unpaid leaves or vacation can make up this “vacation gap” while reducing your payroll for the period of the employee’s absence. As an added bonus, you can avoid staff burnout and encourage the pursuit of outside learning and experiences that will grow your talent pool.

Secondments. The more capable and flexible your workforce, the easier it will be to get by with less. Secondments—transferring an employee from one part of the enterprise to another—are a great way to increase interdepartmental understanding, stimulate staff members who learn new skills and make your staff more entrepreneurial and responsive to change.

Early retirement. This is a more traditional method of reducing personnel without layoffs, but you could take it to the next level by offering extra-early retirees an advisory position that allows you to benefit from their knowledge and experience at a far lower cost.

Like any adversity, staff cuts can be turned into an opportunity. If you handle them well, you’ll end up with a leaner, more flexible organization that is better prepared to take on challenges in the future.

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