HOW TO COST COST WITHOUT SACKING WORKERS

Many organizations think about restructuring when things get tough. And most often, to restructure is to lay off. But finance experts and established entrepreneurs say a firm can reduce cost without embarking on retrenchment. Besides, they note that shedding staff strength may end up creating more problems for an organization that the measure is meant to solve.
One of the biggest mistakes that companies made during the recent crisis was the mass laying off of people to cut costs. Subsequent stock performance proved its unpopularity with investors while numerous studies over the last decade the precedent of long-term damaging effects on company performance. Not to mention are layoffs’ adverse consequences for scores of employees and their families.
In an online report on how to save cost in business, wikihow.com says there a number of things companies do that amount to wasteful spending. For instance, it says one can save a lot of money by sending vital documents via email instead of using expensive courier services. It notes, “ Despite our reliance on computers, too many of us still crave that invoice or order request on paper. Well, that comes at a hefty price”.
Files: Are you still filing your documents and storing them in file cabinets? Cutmonthlyexpenses.com says a better way to do this is to scan your documents and save them in PDF (P ortable Document Format). Then store those PDF’s in an organized folder structure on your computer. Or better yet, build a database to store your information in. Just make sure to have a backup system in place.
Telephone bill: Unless calls made by workers through office telephones are regulated, an organization can run into a heavy debt as a result of frequent and long calls. This may cripple its operation. And for major offices, where official telephones are a necessity, cutmonthlyexpenses.com offers some practical ways to have moderate telephone bill. It says you can contact the phone company and negotiate a better deal; cancel all extra services you do not use; pay your fees online to avoid being charged by low-cost carriers for paper bills; and if you make a lot long distance calls within your state, choose a calling plan with a low intra-state calling rate. It also said, “ Cell phones can be expensive, especially if you are footing the bills for a house full of users; dump the phones that are not absolutely necessary.
Power: Power is still a major problem in some developing countries. Many companies in third world countries rely more on generator for their electricity than the state owned electricity company. Keeping the generator running for hours has, therefore, remained the real challenge, especially with the high cost of diesel.
Companies are advised to use the service of trusted experts when they need to buy generators. For instance, a mechanical engineer, Mr Ade Kalejaiye, says some dealer may cajole one into buying inferior or sophisticated generators but problems emanating from them may threaten the operation of one’s business.
Experts also endorse the practice by some companies by regulating the use of generators. Some switch on their generators at critical hours of the company’s operation; others use at specified hours.
Reduced perks: As much as promotional gift items and end of season’s package for customers may be a way to boost sales and increase a company’s list of clients/customers, experts warns that it should not be overdone. You may send well composed bulk messages to your customers’ cell phones. It is cost effective. You may also design end of season’s cards, which can be forwarded by email.
Cut your salary first: As the head of an organization, you may be prepared to lead by example. Experts say if you want your employees to make sacrifice, you must be the first to have a go at it. Slashing the salary of workers is a better option than retrenchment. First, this will be averting a social problem that arises from mass sacking. It will also help to retain workers whose services are essential to the operation of the organization. Once such workers are sent packing, especially those the companies has spent to train, they may no longer be available when they will be needed again.
Reduce the work: Workers may be requested to reduce the number of hours they stay at work. They may also cut down on the number of days, depending on the scale of work available. Employers are really justified to slash salary once they realize the work schedule has changed and workload reduced.
Be honest: Don’t do all this cost-cutting in secrecy, mainstreet.com says. “Be as, upfront about why you’re taking these steps as possible. Not only does it keep morale high, but it can also push your employees to do their best to pull the business through these tough times. Michael Leen, co-founder of clothing company operations, says he hold weekly meetings with his 10 full-time employees because he feels it’s important to keep his staff in the loop. “Even in bad times, you try to keep employees happy. That’s the key to success”.