Cost saving measures - looking for ideas. Med sized services co with high staff input

Hello.
I am looking to implement cost saving measures in the company I work with.

We need to cut costs without having to cut staff (200 people).

It would be classed as a medium sized services company which depends on staff.

Has anyone out there got some imaginative suggestions or incentives we could put in place to reduce costs?

Maybe there is already a thread about this but I could not find one after a bit of looking.

Thanks.
KS.

Re: Cost saving measures - looking for ideas.

Have you tried asking the staff themselves if they can provide any cost saving measures? They are the ones who are most familiar with the business and obviously it is in their interest if it saves jobs.

Re: Cost saving measures - looking for ideas.

That is in progress Sue Ellen. I just thought I'd look around here to see if I could find anything that might spark some more ideas. No harm in asking around here I thought, especially if it saves having to put people out of work.

Re: Cost saving measures - looking for ideas.

KeyserSöze said:

No harm in asking around here I thought, especially if it saves having to put people out of work.

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True although it is going to be hard for people here to give any indepth advice without knowing the ins and outs of your business which you may not want to go into. Nice to see a thoughtful employer though. Best of luck with your endeavours.

Re: Cost saving measures - looking for ideas.

Thanks Sue Ellen. Yes it is hard without giving too much away.

Re: Cost saving measures - looking for ideas.

What are your stationary requirements like? On an annual basis it can cost a lot more than you might think.

Viking can be very competitive; can you do your own compliment slips/letterheads? (we do) Similarly office equipment in general - shop around (especially if you have ongoing or recurring needs in this area)

Do staff have any non-essential benefits?

e.g. mileage allowance - could it be reduced? mobiles/mobile allowance?

Are all your various procedures/work practices as streamlined and efficient as they can be?
An amazing amount of unnecessary bureaucracy & timewasting sometimes - and time is money of course.

Hard to be specific without more details on the business though but hope the above helps a little.

Re: Cost saving measures - looking for ideas.

Caveat said:

What are your stationary requirements like? On an annual basis it can cost a lot more than you might think.

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1: We're going paperless at the end of the year (can't be done in every business)
: scanning important documents and saving they as images rather than photocopy
: using email and attachments rather than letters
Between, stationary costs and postage costs should save a good bit.

2: Look at your phone usage, no mobile calls, getting better deals.

You say you don't want to cut staff, cut you cut a few managers and keep the workers.

Cost cutting should be a regular part of every business, but it usually only happens when the business gets into trouble. Look at whats happening with income, are you putting as much effort into generating new business as you are cutting costs.

Re: Cost saving measures - looking for ideas. Med sized services co with high staff i

Without knowing more of your business, I'm shooting in the dark. The only way to really answer is to go through your expenditure item by item and come up with ways to reduce each item. Here's some ideas;

IT - check out Google services for hosted email/storage solutions. I recent thread I read elsewhere puts the prices at $50 per user per year. Also check out other services (Amazon would be one).

Phone - check out using VOIP instead of traditional telephones. This may cut your costs a LOT. There are all sorts of VOIP handsets which work over normal telephone lines. Also ask about for quotations from alternative providers - O2,for example.

Rent - are you using all the space you're renting. If you're not squeezed, you've probably too much space Is it possible to move the office to another, cheaper, location? Is it possible to re-negotiate rent? If your company owns the property, is it possible to do a sell/leaseback deal to get some cash flow in?

Receipts/Expenses- do you have good invoice control? Do you have a lot of outstanding debt? Do you need to beef up your debt collection 'cos your current controller is just too nice? Are your paying your debts on time and not before?

Running costs - are you turning off the lights at night? Can you find a cheaper security service? Is the air-conditioning running too high, or too much?

Re: Cost saving measures - looking for ideas. Med sized services co with high staff i

I would like to take a slightly contrary view to the points already made.

Instead of focusing on cost reduction I would review and refocus the business direction in light of the current economic situation.

Do you have a real business plan? One that clarifies for you what your business is about? who your customers are? who your competitors are? what your core competencies are? what your unique selling points are? etc.

When I had that clear I would communicate that to all the work force and enlist their help to deliver a better service to key customers. I would concentrate on those customers from whom you derive the most profit.

I think cost savings are small (if important) part of a bigger picture. Remember that the best way of all to reduce costs is to close up shop!

Having said that have you considered the RyanAir model? This is not for the faint hearted but Michael O'Leary is living testament that it works.

In the RyanAir model the shareholder is king. Everyone else is the enemy and you must "gouge" as much out of them as possible. So you would aggressively take on the work force and get more out of them for less money, take on your suppliers and take as much as you can from them, confront the government and regulators and finally get as much as you can out of your customers and consumers.

Re: Cost saving measures - looking for ideas. Med sized services co with high staff i

Aggressively renegotiate your existing rental on lease costs from everything from premises to photocopiers.

Appeal your rates:
http://www.valoff.ie/revaluation_faq.html
There are a number of companies that will take on your appeal for a no foal no fee basis.

Cut superfluous costs, like the Christmas party and unnecessary travel. Could meetings be done over webconferences rather than expensive travel or videoconferencing?

Review back office support costs - could you outsource your payroll / HR, credit collectioon activity, and Accounts Payable? Plenty of outsourced providers in the market.

Consolidate your suppliers. Do you really need multiple suppliers for the same non-stock items? Increases your bargaining power and reduces the complexity of processing.

Review your 3PL arrangements. Go for a single supplier. How are you handling costly issues in retail companies like returns?

Some more ideas here:
http://www.microsoft.com/australia/smallbusiness/products/howto/cut-costs.mspx
http://costwarriors.com/

Although you don't want to cut heads, there are other ways to reduce payroll costs:
1) Offer targetted staff flexible working arrangements - so they can go part time if they want
2) Offer a sabbatical programme for staff, with some sort of incentive, such as payments continued to be made to pension / VHI when they are away
3) Impose a pay cut across the board, in lieu of redundancies.