Companies Can Cut Expenses Instead of Employees

Posted: Apr 22, 2009 12:01 AM
Companies Can Cut Expenses Instead of Employees

With the current recession, businesses are looking to save money by decreasing costs. But where should a company start reducing expenses? Joel Roth, author of "The 20 Percent Solution: A Practical Guide to Dramatic Cost Reduction in MROP Procurement," has found methods that cut costs, not staff members.

The key is for companies to alter their way of thinking about business practices.

"It is hard to have cost-cutting methods if a company isn't willing to change its thinking," says Roth. "Those companies are in danger during grim economic climates; they won't innovate."

MROP (maintenance, repair, operating and production) supplies should only account for 20 percent of overall costs for a company, according to Roth. However, these supplies consume about 80 percent of a company's time, effort and expenses.

Businesses of any size can decrease unnecessary expenses. Roth recommends trying to reduce the overall costs of producing materials. Avoid purchasing unneeded items. Roth sees many businesses spending money on materials that aren't essential to the company's well-being. Old practices continue, even when they should be re-evaluated to adapt to current conditions.

Instead of purchasing all new items, companies should look into used materials. With more businesses closing, used items are probably easier to obtain. Some companies can even recycle elements rather than buying new. Consider standard items instead of specialized ones -- standard products are usually less expensive and just as functional.

Businesses should look to employees and suppliers for cost-cutting ideas and input. Roth says that employees and suppliers are both knowledgeable about the company's methods; they probably have suggestions to save money. By providing proposals, employees can play a part in the process that may prevent layoffs.

"I want companies to throw out their original ways of thinking and look outside the box to change mind-sets," says Roth.


Managers and staff members seem to value different types of employee recognition. Supervisors feel that job promotions and cash are the top ways to acknowledge administrative professionals, according to a survey by OfficeTeam and the International Association of Administrative Professionals (IAAP) that questioned 549 staff members and 300 managers. Finishing out the favored five methods, managers put paid time off, telling achievement to senior management and in-person thank-you.

On the other hand, administrative professionals rank a simple in-person thank-you and reporting the accomplishment to senior management as their most valued methods of acknowledgment. The other three types of recognition include: promotion, membership to a professional association and registration for a conference or seminar.

Providing proper methods of recognition could play a part in keeping or gaining staff members. Sixty-six percent of administrative professionals say they would probably look for another position if they didn't feel valued by their manager.

"While financial rewards should not be overlooked, the research shows there are other ways to effectively recognize someone's commitment and dedication," says Robert Hosking, executive director of OfficeTeam.

"Administrative professionals are working harder than ever, but their accomplishments usually occur behind the scenes. Therefore, praise from supervisors or colleagues that is specific, immediate and genuine can go a long way toward keeping these employees motivated and loyal."