Considering current states of fluctuating economic and ultracompetitive market conditions, organisations are facing constant pressure to shrink costs and boost bottom line. For HR departments, it’s a many-sided challenge as they are tasked with cost reduction without reducing the headcount. They also have look after improving productivity, boosting employees’ self-esteem and meaningful engagement. Here are some ways HR professionals can use to help their organisations cut costs.
Retain the achievers
A business’s ability to recruit and retain good talent is crucial to the much needed rounds of cost-cutting. An average organisation spends around 3, 00,000 rupees on every hire. And it takes around 40 days to fill up a vacant place in the company. A bad hire can cost the company a bomb to say the least. Moreover, a replacement can cost over 5 times the pay of that outgoing bad hire, all the more so considering the resources incurred to make up for lost productivity and training. To prevent this, you can suggest your organisation to make use of digital technologies like AI, voice-based solutions and social media to make the hiring process an intelligent one; one that retains best employees through employee engagement, training and rewards as well as other retention strategies.
Embrace automation wherever possible
Talk about cost-saving processes, automation makes it to the top in the list. It has multi-faceted benefits. It frees HR professionals from having to do manual monotonous tasks every day. It boosts accuracy, reliability, speed and eliminates the need to manually deal with recurring errors and system delays. There are so many tools like Robotic Process Automation, artificial intelligence, chatbots to employ automation in your organisation. Yet, companies let go over 51% of automation possibilities. For example, Robotic Process Automation offers over 30% cost reduction by automating employment process from screening and assessment to payroll and training.
Nurture talent within
Both traditional and modern wisdom agrees to the fact that cultivating and nurturing in-house talent is way more valuable and cheaper than hiring from outside. Despite this, companies disregard the value of investing into the growth of in-house talent, while shelling out huge moolah to recruit talent from the market. Reality check – It’s 20% costlier to recruit external candidates than nurturing in-house employees! Moreover, over 59% of new outside hires are more likely to quit their jobs or be asked to leave than in-house employees who receive timely promotion.
Many organisations provide perks like team lunches, office parties and reimbursements. Obliterating these to reduce costs can upset employees. Instead, HR can play a role in consolidating expenses like these. For example, you can combine training, seminar and team outing days. You can even have out-of-office events organised on one day for all the departments. This will help you and your organisation cut costs without having anyone feel deprived of any of these things.
First evaluate then cut
The objective of a cost-cutting process is to exclude an activity that’s costlier than the business value it adds. However, not every activity benefits monetarily. Therefore, spot the loopholes, plan the cost-cutting process and gauge the consequences before executing.