Businesses often cut expenses to save money. And while there is nothing inherently wrong with that, the cuts should be necessary and made for the right reasons. Unfortunately, sometimes the moves that companies make to save money ends up costing them much more in the long run.
Here are some “money-saving” ideas that most businesses should seriously reconsider:
Cutting the salaries of current and new employees
On the surface, this sounds like an excellent way to reduce costs immediately. That is, until you give it some thought. What about the effect this will have on morale, which in turn will lower productivity? And the reason you must cut expenses in the first place is probably that your people aren’t productive now.
If you reduce the salaries of new employees, you’ll stop attracting the kind of talent that could help you increase productivity and meet your company’s goals. So, this is also a bad idea, but there some things that could make more sense.
Maybe you could change the salary structures for new hires by connecting it more to performance. You would be allowing them to potentially make more money, provided they stand out in their role.
Another thought: Look at how you’re utilizing your existing workers. Are your people in positions in which they can succeed, or are they being deployed into areas where they have little chance of success? If it’s the latter, hiring extra people for less money will only make things worse.
Layoffs might be necessary, but there are few positives from them. They can decimate morale, weaken your company, and send a message to your customers that things are not going well.
The worst kind of layoffs is those that are done indiscriminately without regard to performance. That could mean cutting an entire department or everyone at a certain pay level, even if some of them were top talents.
Take the time to be selective in your layoffs, so that you don’t lose your best performers in the process.
Failing to invest in your best performers
Don’t take your high performers for granted. These are the workers who will move your business to new heights and become the leaders of the future. They are often ambitious and dream of doing big things.
Make sure you’re challenging them and finding out what they want to work on. And don’t try to save money by holding down their salaries. If they get frustrated, they could end up fulfilling their dreams working for your competitor.
Saving money by buying cheap tools and equipment
You can indeed save money by purchasing discount equipment and tooling. But you’ll lose a lot more on the back end in lost production than you saved upfront. Don’t handicap your workers with inferior brands or, worse yet, by not buying the tools they need to do their work efficiently.
Let us help you find your next top performers
We can put you in touch with the best candidates. Contact the professionals at Select Staff, a top recruitment agency in Dallas, Texas, and throughout the state.