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Common Fixed Costs Cut By Hasty Managers

Your organizations fixed costs are one things you can control in your business. Often managers are overly concerned with cost reductions and remove the wrong things. These wrong things include:

  1. Employee skill training directly related to current role. Training is not optional, in technology industries individuals must be constantly trained in their area of expertise or they will fall behind. Even more importantly, soft skills training rounds an employees value to an organization.
  2. Reducing human involvement in sales process. Automated phone systems remove customers from costly human interaction, but often just cause additional irritation. Automation is valuable in some areas, but let the customer get to a person if that is what they desire. What has it cost you to remove the flexibility people provide?
  3. Support staff that free the time of key contributors to core objective. Today's managers are doing their own typing, even getting their own coffee, and scheduling their own travel. How much time does this take away from actual management?
  4. Adjusting career paths to reduce base salaries. In the past younger employees were matched with more senior staff in an apprentice type role that conveyed key knowledge about specific jobs. By reducing this duplication payrolls are reduced, however, what have we lost in our knowledge management.
  5. Outsourcing knowledge workers to lower cost labor forces. A company can reduce it's payroll by 1/5th by outsourcing high-salary knowledge workers to those of equal quality in another nation. However, what is this doing to labor relations and your companies long-term ability to get high-quality staff.

/ business-success | recession-busting /

By Justin Hitt at August 26, 2003 3:17 AM  Subscribe in a reader


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