If you own or are running a small business, chances you often experience moments when you have to scramble to find ways to cut costs to maintain your bottom line. When this happens, the temptation is often there to simply cut back on employment by firing employees. While this can definitely make a short-term impact in payroll, it doesn’t always lead to positive long-term results.
In many cases, simply terminating and employee ends up costing much more down the road, especially when you consider the cost of low employee morale and poor customer service. There is also the cost of hiring and training a new employee to consider.
There are other ways to reduce employee costs without letting employees go. Some of these tactics are not the most traditional methods, but they are showing results. Here are just a few:
Offer Flexible Schedules
Instead of cutting back on the hours that your employees can work, try being more flexible in allowing employees to choose when they will work. When you allow your employees to have more control over when they work, they begin to treat the job more seriously. They consider this a benefit and will want to work hard to make sure they get to keep it. This helps boost employee morale, making them feel more valued.
You’ll find that you may not have to make as many alterations to work schedules saving you time and promoting a more positive environment at work.
Ask Employees for Ideas
We often hear stories about businesses that have decided to cutback or downsize in one way or another. Many of these will hire an outside consulting company to come in and spend several weeks analyzing their business from top to bottom and then give a report of their findings. This can be a very time-consuming and expensive process.
Instead, start by asking employees for suggestions on how to cut costs. Your employees may be able to offer important insight that you had not thought of before. Employees who are familiar with your customers, processes, products and services may already know what changes could be made to cut costs and improve productivity.
Use Contractors or Interns
There may be projects or tasks in your business that could be performed by a freelance contractor for a fraction of the cost of hiring and paying an employee. The nice thing about hiring a contractor is that you can specify how long you need them to work for you.
Interns are also a good choice when you are looking to cut employee costs. College students looking for experience and school credit are an inexpensive alternative to hiring employees.
Talk to Your Accountant
Over the years, Hacker Accounting has worked with dozens of small businesses in helping them to grow and be successful. As an accounting firm, we often have fresh insight into cuts that can you can make that will significantly impact the bottom line.
If you are looking to make changes in your employee costs, be sure to schedule some time to speak with your accountant or call Hacker Accounting at 602-375-5251.