Cultivate a Cost-Conscious Workplace
In today’s tough business environment, cutting costs and eliminating unnecessary spending is a solid strategy for increasing your business’s bottom line. One way to initiate this strategy is to set specific cost-cutting goals during the planning process. Then create buy-in with your team by getting staff members involved in developing the tactics that will support goal achievement. If you stay the course, you will reap the reward of a more cost-conscious culture that’s committed to company efficiency and profitability.
Why is this particularly relevant now? It’s no secret that since the recession, the rules around spending have been rewritten. For example, before the bust, it was far easier, even more acceptable, for businesses to cover up “sins” such as superfluous splurging and other wasteful ways. But behaviors changed when the economy tanked — and even though many businesses and industries have recovered somewhat, the need to institute a more cost-conscious workplace has become less of a reactionary tactic and more of a cultural norm. Despite that, not every business knows how to address the topic effectively or from a strategic approach. Here are several steps for doing just that:
Develop clear goals. Don’t just go to your team and say, “Hey, we need to save money.” Look at the conversation as an opportunity to talk about goals and how to improve overall efficiency instead. For example, in the planning phase, setting the ultimate goal to cut costs by 3% is specific and measurable. Now your team can understand exactly what’s expected. Next, build accountability for this goal by assigning it to the individuals or teams that will be charged with making it happen. Ideally, you want to get staff members throughout all levels of the organization invested in this primary objective. Involving and empowering as many people as possible will be the key to changing your culture’s mindset relative to increasing company efficiency.
Focus on areas of opportunity, avoiding “Sacred Cows.” When creating efficiency and cutting costs, you’ll obviously need to look at areas in which you’ve got waste and redundancy. But stay away from anything that’s critical to your company’s core mission, such as the happiness or satisfaction of your customers. Many times, in an effort to cut costs, companies will eliminate services or pleasantries that their customers have come to appreciate, expect, and demand — and these companies have paid the price! It’s far better to look at other areas in which you can cut — perhaps negotiating new rates with outside vendors, eliminating unnecessary supplies, spending 10% less on the annual staff party, etc.
Create and motivate with incentives. When you’re tasking your staff members with the added responsibility of finding ways to reduce costs and build a more efficient workplace, make it fun and worth their while! For example, hold a contest that awards the first employee who comes up with a way to save $500 monthly or annually. You could give a $50 gift card to his/her favorite restaurant or perhaps an afternoon off — whatever is most appealing to that person. If feasible, make it an ongoing opportunity for employees, so they can continue to strive for the goal and get excited about their efforts.
What are some ways to reduce costs at work by $500 a month?