As the economy continues to create challenges for companies, many are searching for ways to cut cost. Included in the list that follows are some common and some not so common examples of what companies are telling us they are doing to survive and thrive:
• Reduce hiring and/or terminate underperformers
• Encourage employees to take pay cuts
• Find sublease tenants for underutilized properties
• Identify new sources of revenue
• Hire firms that specialize in cost containment strategy to help (logistics audits, telecom, etc.)
• Review all items on income statement and determine which need reduction/elimination
• Use zero based budgeting and determine ROI for each expenditure
• If you have a sourcing department, use them to pressure pricing concessions
• Create a ‘CFO Bounty’ to pay employees for identifying cost cutting ideas over certain thresholds
• Re-negotiate fees for Tax and Audit and Legal services, etc.
• Shift to a ‘pay for performance’ compensation model. Reduce base and increase commission/bonus where possible.
• Consider purchasing a company that is a supplier to you to reduce overall costs
• Elimination of 401K match
What are some of the steps your company is taking to deal with Cost Containment in the current economic environment?