In recent times, there has been a lot of talk about how businesses can reduce their expenses. I agree wholeheartedly with this and I understand the concern. But what has been suggested is laying off staff and reducing wages by ten percent. This I do not agree with.
Believe it or not, the employee is the most important resource that a business has, and should be treated that way. It is possible for businesses to reduce their expenses and still keep their employees. When businesses see cutting back on staff as the first option to cut back on their spending, it signals that they are not taking a wholistic view of the business.
How Businesses Can Reduce Their Expenses
There is no one size fits all solution for reducing business expenses. Each company has to look at it’s specific variables, in conjunction with the goals that they are trying to achieve. Although layoffs may be the final solution, it is not the only solution. Businesses can reduce their expenses by:
- Reducing unnecessary benefits
- Marketing their business online
- Hiring the right people from the beginning
- Cutting back on office supplies and equipment
- Turning off equipment when not in use
- Using the staff that you have
Let’s delve a bit deeper into these suggestions to see how they can benefit your business.
1. Reduce unnecessary benefits
If your business is going through a rough patch, your top tier of managers can definitely do without large entertainment benefits, flashy cars and extravagant homes.
2. Market your business online
Whilst print newspapers are still popular in some places, the world has shifted everything to the Internet. Social media makes marketing and advertising a lot easier and you can create more intimate relationships with your customers.
3. Hiring the right people from the beginning
Recruitment and selection can be expensive, so it makes sense to find the right people with the most applicable qualifications.
4. Cutting back on office supplies and equipment
Stationery can cost you a pretty penny, so cutting back on this balance sheet item will save you money. Re-use binders, buy recycled ink cartridges, and use free or reasonable software.
5. Turning off equipment when not in use
When something is not in use, turn it off. Most new equipment comes with power savers – use them. When the last person leaves the office on evenings, ask them to turn off the lights and air conditioning units.
6. Using the staff that you have
Hiring new staff can be costly, and paying them can be another additional cost (especially if they are specialists.) I would suggest a little task reshuffling and assigning new tasks. Even if you have to train employees or pay for qualification exams, you are still saving and ensuring that your staff is capable.
Whilst these are some good ideas for businesses to reduce their expenses, I can accept the fact that some more severe cuts might be necessary. If employees was are going to be cut by ten percent, their hours should be cut as well. And even so, this should be a last resort that should not be used until all other options are exhausted.