Often, we view cost-cutting as an unwanted exercise that brings disturbance to the business. We leave it as a last-resort option if nothing else can be done to help the business survive.
Presently, there are many options for transforming cost-cutting exercises into opportunities, making your business better in the eyes of employees, customers and stakeholders.
Jobs across the globe are affected by the current crisis and as layoff and furloughs become commonplace. Stanford Professor of Economics, Nicholas A. Bloom, states that the level of unemployment could reach 30% in the US during the summer. If it happens, unemployment will be higher than during the Great Depression in 1930. Is high unemployment the final answer for an economy during a crisis? Not necessarily.
One way to avoid layoffs and keep your team is to offer a lower number of hours — keep high quality service but reduce working days from 5 to 4 per week. This will give opportunities for your employees to have free time be with family or learn new skills, will save 20% of costs, and will prevent you from needing to hire later and train new staff once the client flow is back to normal.
Offer teleworking as an option
Once it’s safe to return from quarantine, 90% of employees of my company, Home Credit Bank, have indicated they would like to keep opportunities to work from home. Only 10% say their efficiency has decreased while working out of the office, and 25% say their productivity has improved. Remote working is the new normal. By offering it as an option to your employees, not only you will prepare your company for a potential second wave of the pandemic, you will also save costs on rent. Integrating flexible working hours and remote working could save significant costs while making your employees happy.
Fifty percent of costs could be reduced immediately by offering full-time teleworking to half of your employees or offering two or four days of remote working for all employees. For the latter option, you will need to think about how two employees could safely share a cubicle or office. These measures could cut your fixed rent costs in half without disturbing productivity.
To make remote work feasible and efficient, all internal processes should be automated and paperless. Going paperless does not require significant investment and instalments of heavy solutions like SAP. Jira, Confluence or other task-related software can make end-to-end online processes quick, and at a reasonable price.
By switching to online internal processes, you will be able to save up to 15% of employees’ time, save costs on paper consumption, and make business operations more efficient. And let’s not overlook that this will increase the level of control, productivity and the quality of reporting. Working online is no longer an option — it’s a mainstream business rule.
Provide online services for your clients
Rather than waiting for quarantine measures to be lifted, move all interactions with customers to an online platform. A user-friendly website and mobile app will make your clients’ lives easier.
It’s not a secret that even after the pandemic is over, people will be cautious about visiting crowded places. Shift your business from physical branches to online and you will secure sales. Clients will be relieved to have access to services and materials they were used to before the pandemic, and they will not have to spend time travelling to your business, negotiating a crowd and waiting in line.
You have an opportunity to cut costs on rent, move internal and client services to online platforms, and to serve your clients wherever they need without disruption. Help your business not only survive the crisis but also become a better company safely serving your employees and customers.
About the author: Anastasia Fokina, Board member and CFO of Home Credit Bank in Kazakhstan. ACMA since 2013, has 18 years experience in corporate finance, operations and HR, successfully working with multicultural and multifunctional teams in different industries such as logistics, manufacturing, investment holding and financial service.