How to Cut Costs Without Cutting People
2020 was a rough year for many businesses. While the arrival of a new year has a way of instilling new hope and optimism for change, the reality is that the economic changes people are hoping for aren’t going to happen overnight. Cutting costs is an unfortunate necessity for many businesses, especially those who are loath to cut costs by cutting employees. So what can be done to reduce expenses?
Make Employees Remote
Thanks to the coronavirus pandemic, there has been a surge in remote working. This has turned out to be a mutually beneficial arrangement in many ways for both employers and employees. Employees don’t have to pay for gas or the wear and tear on their vehicles since they don’t have a commute. Employers can downsize the size of their office, and possibly eliminate the need for a traditional one, significantly reducing overhead costs. If you find you still need an office, consider the benefits of renting a virtual office and whether that might work well for your business.
Perhaps one of the most beneficial ways to cut costs is to find ways to reduce waste in your business. Waste can come from multiple areas such as office supplies, manufacturing processes, ordering and storing too much inventory, and inefficiencies in performance. Lean manufacturing involves identifying areas where the most waste is produced. It’s much easier to develop an effective strategy for dealing with waste once you’ve identified where it’s coming from.
How you schedule your employees may be one of the reasons for waste within your company. If you can find a more efficient way to schedule employees, you may be able to reduce your labor costs without firing or furloughing any employees. The best way to schedule your employees will depend in part on your industry. A restaurant is not likely to find success by following the same scheduling pattern as a manufacturing plant, and vice versa. You may find it necessary to reduce full-time hours to part-time hours or ask people to go home early if there isn’t enough work to go around.
Cutting costs without cutting people is challenging, but it can be done. Having employees work remotely, taking steps to reduce waste, and finding more efficient ways to schedule your employees can help. By cutting costs without cutting people, you can build employee loyalty and put your business in a better position to do well as the economy recovers.
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