Ever have one of those moments when you unexpectedly find a little bit of cash? Maybe it happened when you were taking clothes out of the wash and saw a few coins lying on the bottom. Or maybe it happened when you were looking for the remote control for the TV and when you put your hand inside the back of the couch you felt some loose change. My favorite is when I put on a pair of jeans I haven’t worn for a while and come across some paper money — a $20 bill if I’m lucky.
So all of us have some cash lying around the house, hidden in places we don’t expect. Wouldn’t it be better if we knew where it was so we could use it? I know I always find the hidden money AFTER I have a need for extra cash.
It’s the same way in business. Your company probably has lots of hidden cash tucked away in little nooks and crannies, and if you found all of it, you’d probably be surprised at just how much it was. I’ll post a series of articles that take a look at where some of this money may be hiding. Let’s start with personnel expenses.
Employee expense is often the largest, or one of the largest, expenses any company incurs. You have a couple of options here. Of course, the quickest way to get more cash is to fire a bunch of people, but letting people go simply for the sake of saving money is almost never a good idea. You may save some cash now, but most of the time it will cost you much more in the future. Reducing staff is something that has to be done strategically. Consider moving people around instead of letting them go; maybe one department has too many people and another area doesn’t have enough help. Could you earn more revenues and profits if you shifted your human resources to another area of your business?
Keep in mind that you can manage your personnel expense by cutting staff or by not hiring additional staff. If you are thinking of hiring additional people, first take a look at your internal processes. Can they be streamlined so they can be done by fewer people, thus freeing up some employees to work in other, revenue-producing areas of your business? The answer is probably yes; typically, any process in use for some period of time is a good candidate for revision or modification.
Take a look at your benefits plan and related tax benefits. Is there a way to restructure your plan so you achieve additional tax savings while your employees receive the same or greater benefits?
Do you use a recruiter to hire staff? If so, consider offering employees a bonus if they refer someone that you eventually hire so you don’t have to pay the recruiter’s fee. Also, remember that the bonus does not have to be all cash—it can be part cash, part tickets to a play, a night in a hotel where you have a corporate account, etc.
Speaking of bonuses, consider offering a bonus to employees if they come up with viable ways to save money. After all, your staff is doing the job day to day, and is more likely than you to know how your company can save money in a given area.
