Somsak, a 42-year-old foreman, feels lost after hearing about his company's decision to lay off a few staff members. His name is on the list.

At his age, he wonders: What could he possibly do? Will he ever get employed again? And, most importantly, when? With two sons at home, this is definitely one of the hardest times in his life.

Twenty-eight-year-old Pinmanee is making a decision whether to stick with her company, which is having financial trouble, look for a new job or pursue a higher education. Her salary was recently reduced and definitely she can kiss her bonus goodbye.

Lay-offs. Paycuts. No bonuses. A hire freeze. Over the past few months, thee have been regular news items due to the global economic crisis.

Well, for Thailand, as if this isn't bad enough, the country has still encountered a severe political crisis that has become one of the biggest challenges the country has to get through. All these negativities have driven the country into a deeper economic disaster, which has forced many firms out of businesses and many job cuts.

Though laying off and cutting pay is a common solution for many companies to deal with the downturns, unfortunate employees may be wondering if it is the only way out. Perhaps, there might also be other options that create win-win situation while at the same time boost the spirits of employees and promote sense of loyalty in the firms.

According to Arinya Talerngsri, managing director at a consulting firm APM Group, laying-off should be a very last option the companies will implement.

For past several months, she has attended meetings with client companies who are ready to lay-off staff as a first step in handling the crisis. However, she says, there are always other options.

To boost the companies' morale and promote loyalty in employees, it's necessary that both top management/executives and their employees discuss about possible solutions together. It's time to create "synergy" and two-ways communication within the firms.

She says before deciding to save the companies' costs by any means, the top management/executives need first to sacrifice.

Initially, one way is to offer to cut back their own salaries and benefit packages during the times of crisis. However, the companies can always offer to pay back the amount anytime when the businesses start to recover.

For instance, if the top management gets paid for 500,000 baht a month, offering to cut back half of it can mean a lot of save-up for the company.

"It's quite useless cutting pay of the employees who already earn not much a month. Normally a one-month salary of a top management can even pay up 30 to 40 [lower level] employees' salaries or more," she notes, adding that she suggested a company about this option and it turned out that it could lower expenses by more than 50 per cent.

Other luxurious benefit packages of the top management, if possible, should also be sacrificed. For instance, expensive golf club or gym membership, too generous petrol or transport allowance and other unnecessary entertainment allowances.

"Usually there are allowances that considered unnecessary and management don't really use them. So why not save them?... There are firms that cut all benefits of [general] employees while those of top management remain unchanged," she explains.

When the initial step of cutting back management's luxurious packages and benefit is done, then the firms can consider cost cutting in other areas including general operation and employees' benefits. Also, this must be done after the discussion of both parties.

Generally the cut back should not, and must not, affect the work and working life of the employees, she emphasises. For instance, cutting back gas or mobile phone allowances of salespersons is considered unwise as it will definitely affect their work, which will end up ruining the productivity. These expenses are considered vital for their daily operations.

Sometimes, the firms even have to consider changing the way of working to save costs, she suggests. For example, if the companies intend to save electricity and water bills and gas allowances, they may want to offer the employees to work from their homes.

Moreover, it's time to review companies' performances and investments. "There are times that the firms have carried on the projects that aren't able to generate revenues yet tend to dry up their financial resources year after year. Perhaps it's time to consider to stop wasting money, which is now a very limited resource, on it and move on," she notes strongly.

Ian Till, a country manager of Hewitt Associates (Thailand), has also witnessed the cost saving schemes implemented by many companies. Some decrease their travel budgets particularly for those regional companies where corporate travel and associated hotels are a big expense. Increasingly the companies are looking to use audio and video conferencing as an alternative to physical meetings.

Traditionally training and development costs are also one of the first areas to be targetted with companies brining more training in house instead of engaging external vendors and decreasing the frequency of training. Besides, the firms may also adopt contract workers to increase flexibility and reduce costs.

During this time of crisis, Till says it is always good to see desired behaviours being modelled by senior management - it shows that they are sincere and care about the workers. When they are not, the company quickly loses its brand in the market and may even become the object of derision.

"There are different ways to demonstrate this during a downturn with the most obvious being taking a salary freeze, foregoing bonuses or taking a voluntary pay cut. We see these actions happening in some companies at this moment where CEOs are taking token $1 [30 baht] salaries and foregoing their bonuses and the press is lauding them. However, we also have seen situations where CEOs fly their private jets to Washington to ask for multi-billon dollar bailouts from the Government. Such actions show a fundamental lack of sincerity, a detachment from the reality of the situation and tend to creat animosity between management and employees," Till says.

On top of that, it's important to communicate. In situations where an organisation is having to make tough decisions and retrench people, it's critical that the management communicate as openly and honestly as they can about the situation to their employees. Failure to do so results in internal rumour mungouring.

An example of a proactive approach, he continues, to dealing bad news was a hotel that was going through tough times a few years ago. This hotel openly shared the situation with the employees, even to the extent of opening their financial books to all employees. They then posted daily room occupation rates and room rate statistics so all employees were aware of how the hotel was doing. Employees were asked for suggestions on how to save costs - many of which were implemented.

"When job cuts were required, all employees were aware of the efforts that management take to try and avoid the situation. While sad to leave, they left feeling they had been well cared for. Once the economy improved, these were the first people to be re-hired back," he explains.