Cost cutting should be done based on our companies requirements and future plans.
1. check in which area/ dept you don’t see growth in future / least important to your business. Try to dissolve that dept.
2. check for redundant employees in the company. We doesn’t need to take up the cost of redundant employees.
3. If we are in the process of cost cutting, do it immediately. If we take time to do it, it will become much more burden to us.
4. If we are in the plan of removing a team/dept, think whether their skill set suites to other projects(if required). So that indirectly it reduces the cost of recruiting new employees.
5. Main burden for small scale business is office rent. If you think that this much big office is not required for next 2 yrs. Then move to smaller one in the same building/ nearest to the current one, so that employees don’t suffer.
6. If you can make your office into two divisions then go for it and give 30% of your office space for lease.
7. If you have parking space, give it for rent.If it’s a rental one decrease parking size.
8. check whether systems, lights,fans, A.Cs are switched off when not used.
9. Some time situations occur to do this. don’t need to have revenues but should get profits.
10. We need to look for diversification of our company.
11. Don’t depend on single project (feelings like “this project is my brain child, I doesn’t want to take up any other projects”. should be avoided). Try to look into all profitable projects.
Once cost cutting is done, explain to employees why these things have done, growth of the company and future plans and projects of the company including profits of the company. This gives confident to employees that they are safe and company is in good condition.
After implementing cost cutting methods, try to introduce some less cost benefits to existing employees so that they won’t feel bad about our company.
These things should not be done in cost cutting-
1. Should not cut current benefits we are giving to employees. This effects all the employees instead we can dissolve unwanted employees.
2. Don’t compromise on basic needs like office cleanliness, purified drinking water, electricity etc.
3. Don’t sell out unused systems and furniture. These are most wanted and one time investments.
4. Don’t touch key employees and don’t make them involve in cost cutting as it may hurt them and may try for other opportunities. Inform just an hour or day before and tell them that they need not worry about this process and it will not affect them.
1. check in which area/ dept you don’t see growth in future / least important to your business. Try to dissolve that dept.
2. check for redundant employees in the company. We doesn’t need to take up the cost of redundant employees.
3. If we are in the process of cost cutting, do it immediately. If we take time to do it, it will become much more burden to us.
4. If we are in the plan of removing a team/dept, think whether their skill set suites to other projects(if required). So that indirectly it reduces the cost of recruiting new employees.
5. Main burden for small scale business is office rent. If you think that this much big office is not required for next 2 yrs. Then move to smaller one in the same building/ nearest to the current one, so that employees don’t suffer.
6. If you can make your office into two divisions then go for it and give 30% of your office space for lease.
7. If you have parking space, give it for rent.If it’s a rental one decrease parking size.
8. check whether systems, lights,fans, A.Cs are switched off when not used.
9. Some time situations occur to do this. don’t need to have revenues but should get profits.
10. We need to look for diversification of our company.
11. Don’t depend on single project (feelings like “this project is my brain child, I doesn’t want to take up any other projects”. should be avoided). Try to look into all profitable projects.
Once cost cutting is done, explain to employees why these things have done, growth of the company and future plans and projects of the company including profits of the company. This gives confident to employees that they are safe and company is in good condition.
After implementing cost cutting methods, try to introduce some less cost benefits to existing employees so that they won’t feel bad about our company.
These things should not be done in cost cutting-
1. Should not cut current benefits we are giving to employees. This effects all the employees instead we can dissolve unwanted employees.
2. Don’t compromise on basic needs like office cleanliness, purified drinking water, electricity etc.
3. Don’t sell out unused systems and furniture. These are most wanted and one time investments.
4. Don’t touch key employees and don’t make them involve in cost cutting as it may hurt them and may try for other opportunities. Inform just an hour or day before and tell them that they need not worry about this process and it will not affect them.
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