Whether you manage accounts, sales, advertising campaigns or lead the people that complete these tasks, you will most likely be familiar with the negative effects cost cutting never fails to unearth.
Doing your job becomes that much more difficult. You now have to spend an extra day justifying the budget. You need to bring in your own stationary. Beverages are no longer subsidised nearby or provided in the office free of charge. Your request for a computer upgrade which will make your daily tasks seamless, is now not even on the table, let alone being looked at. Need I go on?
When companies become financially strained, constricting the life blood of the organisation never results in a more efficient or effective environment.
At the top level, it is all too easy to look at a team or an office as numbers on paper. Successful executives and managers are usually much better off than their subordinates and a small cut in allowances can seem like a small yet effective cost cutting measure.
But are expenses all that cost cutting really gets rid of?
Not being at executive or managerial level means you’re not as well off as others in the company. The stationary supplies given to you by the company mean a few hundred dollars in savings each year. Refreshments (code for caffeine?) being subsidised or provided easily amounts to thousands a year. And having to pay for computer or phone upgrades to make your tasks more easily completed can quickly amount to all previously mentioned costs times three!
Financial stress is never a good thing for employees. Not only will it mean that your team is less focussed on the task at hand, but when it is caused by the company that supports the team, it can also result in serious resentment and grudges against the company. Employees that feel as though the company has cost them something and not contributed to their wellbeing are employees that have been let down and they will no doubt show this.
If you are a manager in need of support to fight cost cutting, or an employee wanting to
convince your manager, try reading the book “Make More Money by Making Your Employees Happy“. The author Dr. Nelson, a clinical psychologist explains that
“When employees feel that the company takes their interest to heart, then the employees will take company interests to heart”.
The book received a fantastic review by Forbes and is an is an extremely useful resource for combating the temptation of cost cutting.
Does making more money from your employees require taking a financial risk and increase spending?
The short answer – no.
Bright Horizons released a study in 2012 that found 89% of employees that had high levels of well-being reported high job satisfaction and close to two thirds reported consistently putting in extra effort at work. Of course we know that a happy worker does not automatically result in a productive worker. However what we do know is that people are increasingly seeking out acknowledgement, meaning and gratification in their careers, and are less concerned with only the monetary reward.
The ROI for making your employees more satisfied cannot be underestimated. Another useful resource is Mashable’s article on the ROI of Your Office Espresso Machine.
What does this ultimately mean for those needing to improve profit margins?
Spend more time giving and less time taking, and you’ll find those around you will respond in kind.