Industries and business are inevitably faced with periods of economic uncertainty where they are forced to make difficult decisions with regard to how the business operates and where cost reduction can be found. Often, many of the businesses opt for headcount reduction as their primary initiative for reducing cost which can place a significant human impact on your staff. It is often these deep headcount cuts that provide a negative long-term impact. This impact outweighs the short-term cost savings associated with headcount reduction.
Companies don’t cut costs because it’s an enjoyable exercise. In almost all instances the business is under significant pressure, whether it be external forces, commodity prices, business competition or simply a slump in sales growth due to weak economic conditions. Understanding what drives business cost, will help define your ideas and initiatives to make meaningful and long-lasting reductions in cost.
Successes in cutting costs erode with time, this article will examine strategies and techniques on how to implement some cost control quick wins as well as define some of the strategies that can be utilised in the medium and longer terms.