9 Ways to Manage Costs - Infographic
9 Ways to Manage Costs - Infographic

9 Ways to Manage Costs - Infographic

HR and business leaders are looking to cut costs—but cut too deep, or in the wrong places—and you’ll pay for it down the road. Check out this infographic to learn the 9 ways business leaders can manage costs and return to profitability in the future.

9 ways to manage business costs

  1. Forego Discretionary Spending
  2. Develop a 90-day cashflow forecast based on your fixed and variable costs. Then, stress test the forecast against best/worse-case scenarios. You want to get a sense of how much (and where) you need to cut.

  3. Reduce Extra Supplies & Inventory
  4. Reevaluate inventory and supplies from the bottom up—ask what you need, rather than what you can reduce. Consider both best-case and worse-case scenarios: running down stocks might leave you unable to meet the demand of a quick return to growth, but you’ll be less exposed to an extended slump.

  5. Renegotiate Debt and Rent Obligations
  6. Show your landlord (or lender) that you’ve exhausted your options; invite them into the process so they feel like a partner. Propose a temporary deferment or a rent reduction, spread out over the remainder of the lease. At minimum, ask for forgiveness on late fees and an agreement not to report late payments to the credit bureaus.

  7. Outsource Payroll
  8. Compare the costs of inhouse vs outsourced payroll, but don’t stop there. Remember that whoever is in charge of your payroll has a legal obligation to stay on top of emergency legislation and rapidly integrate changes into the system. That’s a daunting (and risky) task even in normal circumstances.

  9. Create Maximally Efficient Schedules
  10. Take a closer look at your scheduling practices. Are managers routinely under or over-scheduling? Are you making payroll mistakes due to inaccurate timesheets? Are you consistently surprised by unplanned overtime? If so, scheduling software may actually save you money.

  11. Optimize Benefits
  12. Work with a trusted broker to evaluate all the ways you could optimize your benefits spend.

  13. Reduce Employee Hours
  14. No one wants to reduce the hours or salaries of the team you worked so hard to recruit, train and develop. If you make this move, scale salary reductions to protect lower wage earners (i.e. executives take a 15% cut, frontline workers take a 5% cut).

    Make sure your team understands what’s driving the decision and go above and beyond to do the right thing. When the economy recovers, you’ll want to be able to hire back your top talent and to do that, your company’s reputation must be intact.

  15. Reduce Your Workforce
  16. Look at duplicative roles across the organization and then conduct a critical skills assessment to make the tough call of which employees stay. As much as possible, transparency in decision-making is key; now is the time to over-communicate and to show that your decision-making was pragmatic and fair. You should also manage layoffs with an eye toward the future. What is the plan to shore up team morale post-layoff? The answer to this question will be unique and personal to your company, but one thing’s for sure: managers will play a key role (see our last suggestion for details).

  17. Invest in Managers
  18. Prioritize continuous education and learning for your managers. Your HCM provider should be able to provide both ready-made courses and the technology you need to easily design your own training. Core managerial skills to train for include balancing demands from multiple constituencies, interpersonal skills and emotional intelligence, delegation and the giving and reviving of feedback.

Share this Infographic On Your Site

More to Discover

Take Our HR Benchmarking Quizzes

Take Our HR Benchmarking Quizzes

Paycor's research shows that 75% of high-functioning HR teams spend their time on mastering key pillars of HR excellence. Want to know how your team stacks up against others? Take our benchmarking quizzes to find out and get customized action plans based on your results. Recruiting Benchmark Quiz Benefits Benchmark Quiz Labor Costs Benchmark Quiz People Management Benchmark Quiz Compliance Benchmark Quiz

Webinar: COVID-19 and Unemployment Cost Management

Webinar: COVID-19 and Unemployment Cost Management

With unemployment across the U.S. skyrocketing, Ohio and 18 other states are revising unemployment laws to ease the burdens of Americans everywhere. How will these laws affect business owners? What do leaders need to do to remain compliant? Watch this webinar to learn more. Speakers: Ezrie Yellin and Katie Watkins Ezrie has worked in the HR compliance industry for 15+ years. He works across HIREtech’s technical and business teams to ensure that all products and services deliver the best user experience while enabling compliance across the employee life cycle. Katie leads the client relations team at HIREtech for several products, including Unemployment Claims Management. Her proficiency in cultivating processes that bridge the gap...

8 Ways Manufacturers Can Manage Costs and Prepare for Future Growth

8 Ways Manufacturers Can Manage Costs and Prepare for Future Growth

It’s no surprise that many manufacturers are struggling: worldwide lockdowns have hurt demand while all-important supply chains have been badly damaged by factory shutdowns, particularly in China. At the same time, many businesses have been forced to temporarily cease operations, with remote work not an option. Businesses are hurting and even a quick return to normal won’t fix things. View 8 Ways Manufacturers Can Manage Costs Challenges Ahead Stay at home orders, radically reduced demand and disrupted supply chains are putting enormous pressure on the manufacturing sector. No matter how the upcoming months play out, manufacturing will be dealing with the ripple effect of this public health crisis for a long time. To help, we are sharing...

9 Ways to Manage Costs and Prepare for Future Growth

9 Ways to Manage Costs and Prepare for Future Growth

In this guide, Paycor outlines nine ways to cut costs, with an eye toward a return to health and profitability in the future. Some of these approaches you’ll have already implemented, others might not work for your business. Rather, the list is meant as a framework for a conversation between CFOs and HR leaders, both of who will come to these decisions with a unique and valuable perspective.