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5 Ways to Cut Costs in Your Business

Last updated: August 23, 2022 ·

Post-pandemic policies, the great resignation, remote work going mainstream, supply chain issues, soaring gas prices, shortages, the war in Ukraine, and now, recession looms in the economy. 

As the old saying goes, may you live in interesting times. 

The world of work is changing at the same time the economy is going through a squeeze. Businesses need to be more lean and nimble than ever. To help you with ideas, we did some digging and came up with five relevant ways businesses can cut costs.

Outsource or Augment Development Teams 

Even before 2020, companies were experimenting with outsourcing to save on salaries. Because of the nature of the work, software development was a popular task for outsourcing from the start.

The world of work is changing at the same time the economy is going through a squeeze. Businesses need to be more lean and nimble than ever. Click To Tweet

For companies that don’t want to completely outsource development projects, or don’t need to hire full-time outsourced employees, team augmentation is a good alternative. The right blend of in-house, outsourced, and augmentation talent can save on development costs. You can read more about the pros and cons of each in our post about team augmentation vs. outsourcing

Invest in Teams to Reduce Turnover 

Speaking of teams, it might seem counter-intuitive in terms of cutting costs to talk about investing in your teams. One way to think of investing in your team is that it’s like preventive medicine. A 2018 LinkedIn survey of industry professionals reported that tech companies have on average an employee churn rate of 13.2%, going as high as 21.7% for embedded software engineers. 

In the long run, companies may save money on turnover and project delays. Time spent looking for, onboarding, and training new hires adds up, too. It may be time to identify and survey your most valuable tech talent to pinpoint areas you could invest in them outside of salary compensation.

Studies show that above an adequate level of monetary compensation, other perks like public recognition, paid time to work on passion projects, and time spent with a valuable mentor can yield returns in reducing costs associated with employee turnover. 

Hybrid Work Policies and Office Space Planning

When the lockdowns of 2020 sent everyone home, it also sent many companies on a quest to downsize their leased office space. If you are fortunate to not be locked into a long-term lease, you may want to consider a hybrid-remote work arrangement that doesn’t require providing a workspace for every employee every day. 

Some companies are leveraging co-working space leases for remote employees. Regardless of where your offices are, management needs to weigh the tradeoffs of cost savings on lease vs. the significant challenges of building and managing effective, happy remote teams. 

One place to start is communicating clearly about what remote work means in your company. Define your model and set expectations and policies around remote and hybrid work. Here are some hybrid models companies are using today:

Fully remote: this is what it sounds like - no lease space at all, everyone works at home, from anywhere in the world. Going into the office is not an option, because there is no office!

 
Flexible hybrid work model: Companies like Cisco are experimenting with letting employees choose their location and working hours depending on their daily priorities. They can work from home or anywhere outside the office. If they need to meet with their team or just want to be around others for the day, they can go into the office. Some flexible models still require employees to live within drop-in distance of the office.

Fixed hybrid work model: In this model, the company sets up days and times for employees to be in the office. Another option is allowing everyone to work from home on pre-determined days each week. 

Office-first hybrid work model: In the office-first model, employees prioritize coming into the office yet may choose a couple of days a week to work remotely.

Remote-first hybrid work model:  Twitter is a company experimenting with this model. Employees work remotely most of the time and team members coordinate a meeting space when they need to meet in person.  

Fewer Ads, More Marketing Fundamentals 

If you have paid advertising in place with good ROI, it may make sense to keep that engine going. However, for campaigns that aren’t performing well, it’s time to cut the cord. You can bolster paid efforts by doubling down on the fundamentals. 

Revisit your CRM and email list-building strategies. Creative campaigns to increase opt-ins, like contests or small rewards, are inexpensive and can be effective. 

Additional ideas include:

  • Reach out to existing customers for fresh testimonials and offer a referral program
  • Create a plan to spend more time networking on LinkedIn or in person
  • Run an audit on your website copy and make changes to improve traffic and conversions
  • Run fewer, more focused marketing campaigns

Tighten Up Team Productivity

Management guru Peter Drucker said, “What gets measured gets managed — even when it's pointless to measure and man-age it, and even if it harms the purpose of the organization to do so.”

Although the phrasing is dated, that common sense adage from the 1950s Company Man culture points to two steps. One, decide why a metric is worth collecting. And two, if it is, collect data with purpose or intent. With remote teams, measuring progress may look different than when everyone was in the office. It may be important to establish set times for logging into work, for example. 

While no one likes to feel monitored, clients and upper management may still want to see proof of billable hours. Tools such as Connecteam and Toggl can track employee time usage by the project. 

Employees may need advice and tips on setting up non-distracting remote work environments. Companies can also offer workshops and suggest focus apps like Rescue Time or Focus Booster to help employees focus and stay on task.

Best practices for meetings have not changed for decades. Following simple guidelines will help capture stray wasted hours. Prepare an agenda ahead of time. Set expectations for timely “arrival”,  even if the meeting room is on Zoom. Have a “camera on” policy to make it harder for people to multitask. End the meeting on time, scheduling any sidebar conversations into a different time slot or smaller group. 

The Bottom Line

Even though challenging times are uncomfortable, they provide an incentive to cut waste, improve processes and revisit the fundamentals of your business. If outsourcing or team augmentation makes sense for your cost-saving strategy, we can help you with that. Contact us today. 

Checklist of Ideas for Cost Cutting Strategies 

  • Consider outsourcing or augmenting development teams
  • Invest in teams to reduce turnover
    Provide public recognition for good performance
  • Offer paid time to work on passion projects
  • Provide valuable mentoring or career development opportunities
  • Consider hybrid remote work models to save on office space
  • Revisit your CRM and email list-building strategies
  • Reach out to existing customers for fresh testimonials and offer a referral program
  • Create a plan to spend more time networking on LinkedIn or in person
  • Run an audit on your website copy and make changes to improve traffic and conversions
  • Run fewer, more focused marketing campaigns
  • Use apps to track and measure employee productivity
  • Provide resources, tips, and tech to help employees manage distractions
  • Follow best practices for meetings

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