With rising prices hitting us all, we're all looking for ways to cut costs right now.
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But cut from the wrong places and you'll pay a much higher price.
Just look at Meta, where recent large-scale performance-based layoffs sparked employee backlash and public criticism over how the cuts were handled.
The lesson? Cost-cutting isn't just about the numbers. It's about how you implement changes. I've helped many business owners, like you, to trim expenses without damaging their culture or breaking employment laws. Let me show you how to do it right.
Start with a strategic approach
Before making any cuts, consider these questions:
- Which costs are truly draining your profits?
- What can you trim without affecting quality or service?
- What are the potential ripple effects of each decision?
The best way to cut costs is to be targeted and thoughtful. Not just slash everything by 10% and hope for the best.
5 smart ways to reduce costs (that won't backfire)
1. Review your workspace needs
- With mixed home and office work now common, do you really need all that office space?
- Many of my clients are saving thousands by downsizing premises or negotiating better lease terms.
- Consider shared desks, flexible arrangements or even co-working spaces if your team isn't in every day.
2. Get your staffing levels right
- Are you staffed correctly for your current workload?
- Look at your busy and quiet periods. Could flexible hours, part-time contracts or seasonal staffing help you to match costs to income more effectively?
- This isn't about cutting jobs. It's about having the right people at the right times.
3. Streamline your processes
- Inefficient processes aren't just frustrating. They're expensive.
- Where are your team members spending time on manual tasks that could be automated?
- What bottlenecks are causing delays and overtime costs?
- Simple process improvements can deliver immediate savings without reducing quality.
4. Handle sick days better
- Unplanned absence is a hidden cost that affects your whole operation.
- A clear policy, brief check-ins when people return and supporting staff health can make a real difference.
5. Keep your best people
- The cost of replacing an employee can be 1.5 to 2 times their annual salary.
- Sometimes your most effective cost-cutting strategy is reducing staff turnover.
- Regular check-ins, fair pay and chances to grow are far cheaper than constant recruitment.
What NOT to do – learn from others' mistakes
I've seen businesses get this wrong, much like Meta, who've damaged their reputation with poorly executed cost-cutting:
Don't change pay or contracts without discussion
- Changes to employment terms require proper discussions and agreement.
- Rushing these decisions can lead to formal complaints, legal challenges and even walkouts.
Don't ignore the legal stuff Reducing health and safety measures, skipping required training or cutting corners with wage rules will always cost more in the long run.
Never keep people in the dark
- When staff suspect cost-cutting but aren't told what's happening, rumors fill the vacuum.
- Be transparent about challenges while involving your team in finding solutions.
Here's my perspective I've seen how cutting costs can either make or break a business. The difference is always in the approach. With proper planning, open communication and a smart approach, you can protect your profits while keeping your team motivated and productive. The smartest business owners I work with know that cutting costs intelligently today helps to secure growth tomorrow.
Need help with finding the right balance between savings and sustainability? I'm here to help. Let's have a confidential chat about how we can reduce your costs without increasing risk.
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