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A guide to cutting costs now!

Lots of us are watching are wallets and bottom lines. Many organizations keep a close eye on costs because it’s good business. Today, however, controlling costs is probably more important than ever. Of course, that doesn’t make it easy or simple. In a perfect world, it would be great to cut costs, maintain or increase productivity, and keep your best employees satisfied. But this isn’t a perfect world. So, I wanted to share some good ideas from Tom Armstrong’s Cut Costs Now: Tips to save money during tough times. A more detailed excerpt is available here.

1. Know where your money goes

Determine the amount your group spends in each area and exactly where the money goes. Then determine whether making certain cuts will or will not have a significant effect on your costs. Is it a large amount in itself? Is it a large percentage of your budget?

2. Determine the “costs” of reducing expenses

Like most important things, cost-cutting comes with a price. You may even have to spend money to save money. Cutting costs doesn’t happen in a vacuum. It’s smart to consider how the work groups, individuals and executives around you, as well as yourself, will be affected - because they will.

Don’t forget to admit that cuts are often painful, for you as well as for your employees. Loss and anxiety can create fear and anger, which can kill confidence and engagement. How will you cope with negative fallout from your actions? How will you keep people positive and seeing possibilities? Keep reading…

3. Decide how to motivate and reassure your employees

Communication is key in making – and living with – money-saving changes. Communicate how the cuts lead to positive benefits for the organization. Highlight benefits to employees. Be transparent and share details of the cuts with employees.

4. Investigate sharing costs with partner departments

Cooperating with fellow departments can lower costs for all by saving on work space, supplies, equipment, even staff.

Add a comment above with your ideas for cost-savings tips.

You can also purchase the full report of Cut Costs Now: Tips to save money during tough times.