Corporates spending big have turned stingy. Cost management, the latest trend is an effective tool to control expenses for the benefit of the company.
Robust, progressive and forward looking companies are doing what is the need of the hour – managing cost. Efficient cost management includes spending where it is absolutely necessary, stream lining processes and also cutting flab.
For the HR team in any organization cost management is as important a target to meet, as it is for the marketing or sales division. It becomes a challenge for them to simultaneously manage employee expectations and costs. There is certainly no doubt about the fact that firms across sectors are taking proactive measures to manage costs better in times of stress. All things that were unlimited will now come under one cap. This is a good time for HR managers to come up with innovative ways to rationalize cost
While cost cutting refers to a situation where companies stop certain internal activities or functions altogether cost management translates into effective utilization of the resources available. In other words, it is an effective method to control costs and manage money for the benefit of the company.
When corporate houses decide to cut costs, it entails the sacrifice of business development and growth, as it is most likely to adversely affect the company’s customer service, R&D and technology. On the other hand, cost management ensures that the revenues available to a firm are smartly deployed. It involves short term and long term planning, and controlled decisions that increase value for customers and lower costs of products and services.
In lieu of the grim global business outlook a lot of firms are consciously implementing cost management measures to enhance productivity. Besides the usual curb on travel communication etc firms are managing costs by postponing plans to lease new office spaces freeze proactive hiring to avoid any potential overheads etc.
Mindteck India is accelerating entry level training program called ‘Mindteck Academy’ to churn out more to deploy fresh engineering graduate. The company has also increased its focus on contracting employees as well as restricting international travel.
The above measures will help us keep our expenses flat for next few months till the uncertainty passes away. Additionally we are trying to seek out suggestions/innovative ideas from our employees to manage costs and enhance productivity.
There are two cost management strategies identified that can be extremely effective. The Compensation strategy which involves salaries based on fixed and variable factors. This means keeping the salaries at the basic level, but encouraging the more talented employees who deliver above expectations. Many corporates are encouraging their internal employees to focus on training, and deliver above and beyond the client expectations; increased productivity will result in accelerated career growth for the employees.
The planning and control of costs is usually inextricably linked with revenue and profit planning. If companies focus on cost management as a part of their regular business practice, the former will not be seen as a measure to tackle crisis situation.
Even though there are ample examples of how an effective deployment of various workforce management tools has benefited several organizations, it is said that Indian firms are yet to accept these tools on a big way. According to industry experts the current economic situation is the most appropriate time for organizations to invest in proper tools for managing their workforce as it helps not only in better management of the workforce but also to save on unwanted expenses too.