When the economy is in recession or the product is no longer as saleable as before or more competitors are eating away your market share, you are experiencing tough times. Besides staying afloat and making it through the challenges, you are also faced with the issue of employees. What should you do with them? Is it time to lay them off to cut on costs?

Here are the best ways to deal with your employees when your business in crisis:

• Train your employees.
Although training employees means incurring additional costs, it is a way to make sure that you do not end up losing certain important functions when you have no other choice but to lay off some of them. You can teach them a whole new skill or expand their job description.

• Do your best to avoid a layoff.
For some businesses, the easiest way to cut on costs and increase profits is to lay off some employees. Nevertheless, you should understand its repercussions. For one, it is not going to give your business a good image, especially in the eyes of your customers. It may be taken as a sign that you are not really taking care of your people.

Moreover, it is going to be costly. When the business picks up, you are going to spend funds on training a whole new set of employees, who may not function as well as the ones laid off.

There are many ways to avoid layoffs. It may simply be a matter of letting your employees understand the present situation. You may reduce their working and overtime hours or temporarily stop certain allowances and fringe benefits.

• Encourage employees to contribute.
You can share the load with your employees and encourage them to contribute to the betterment of the situation. A lot of them could just be waiting for the best opportunity to share their thoughts. You can encourage them to share their best innovative methods for a product or service. You may ask for inputs on how to automate certain processes further or even how to save more on costs and how to boost sales.

• Take a good care of them.
It is during tough times that you need to pamper your employees a little bit more. Reward and recognize their efforts or become a better boss. The last thing you want to happen is for them to give up on you and your business.

• Make them an informal addition to the marketing team.
When the economy is not too good, marketing campaigns suffer. And at a time when you need to bring your business closer to your customers and prospects, to save costs on marketing, you can tap the rest of your employees as informal marketers.

They can promote your business in their own blogs, talk about the latest products and services with their friends, set up fan pages on social networks, send updates on Twitter, or forward company newsletters to others.

Encouraging them to do these will make them feel more important to the organization and value their contribution more.