In a time of global recession and budgets being cut everywhere, it is becoming increasingly hard for companies to survive and to return a profit for their shareholders. It can be done, but it requires fiscal fitness and a lot of discipline. It also means that managers need to look at all the expenses they are committed to and find out ways to cut these. It is very true that cutting costs do not grow business (that can only be done by driving sales), but reducing costs is great for profitability and returning better profit margins. So, with that in mind, here are a few places where costs could be cut.
Most corporates spend a great deal on travel budgets, sending people around the country for face-to-face meetings with colleagues and clients. These trips tend to be very expensive with subsistence and travel costs added to car rentals, accommodation and of course airfares. And more often than not the return on the travel investment is simply not commensurate with the outlay. As an alternative look to see what you can do with video conference services Sydney has plenty of providers available. The conferences save a huge amount of time and they still provide the face-to-face feel that you get from sitting in the same room.
One way to save costs is to do away with leave allowances. It is a trend that has caught on in America with many tech companies who allow their staff to have as much leave as they want – as long as their prescribed work or KPIs are being met. The result of this policy is that people tend to work harder. It also does away with a whole lot of administrative hassle. But the biggest benefit is that there is no accumulated leave to be paid out when the person ends up leaving. For many companies the leave liability is very high – it is something that can easily be done away with in changing the way the holiday allocation is framed.
Employment (retention and referrals)
There are big costs involved in training and inducting staff. And when long-term staff leaves there is a lot of institutional knowledge that walks out the door with them. Try hard to keep your existing staff on board and working for you. The costs of replacing them are a lot higher than you realise.
Work from home
Tell your staff that as long as they are achieving the results that are required that they are welcome to work from home. You don’t need to incentivise it for them by paying for internet and mobile phone. That is a cost that they need to pick up if they want to enjoy the comfort of working from home. There are plenty of advantages for the staff in terms of more time in bed, less to pay for travelling to work and general comfort. From the company’s side, there are costs that are incurred every day that people are in the office. It is the incidentals like milk and coffee, it is water and electricity and all sorts of other incremental costs that add up the more people there are in the office.