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    One of the ways to stay afloat in the face of recession is to effectively cut costs. Cutting costs can be positive if deployed appropriately and can also be destructive when you aren’t careful. 
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Presently, the world is faced with an economic depression. Companies are shutting down, workers are being laid off, and many are downsizing. This is not a good time for business owners and their employees. However, this is a time when founders will become strategic in cutting costs. In this article, I discuss how companies can cost without getting negatively affected.

  • Reduce Working Hours

During the recession, wiser companies have reduced working hours to cut the cost of operation. Running on company fuel from 8 to 4 p.m. is costly and can create a dent in the company’s finances. In a bid to put up a coping mechanism, it is advisable to reduce working hours from 9 hours to 6 so that there can be a reserve on fuel and energy. When there is a reduction in working hours, employees can be wired to do so much within a short period. 

  • Shutdown Unproductive Operations

In a time like this, rather than keeping up all quarters and running, it is important to shut down those areas that are not productive.
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For instance, rather than keeping two offices where the same tasks are done, it is important to collapse both offices to save energy and power costs.

  • Shun Flamboyance

A recession is a time to cut your coat according to your clothes. For instance, the recession is a period of looking for products or services that can be gotten at a cheaper rate. Rather than use a five-star hotel for conferences, less expensive options like four-stars or enclosed parks should be considered. On this note, you must put your company on a low budget at all times. 

  • Consider Eliminating Needless Allowances

Doing this will take the cooperation of both employers and employees and such changes will be effected across the board. For instance, you can ask employees to work from home so that transport allowances can be eliminated and invested into the business to keep it afloat.
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As earlier stated, these changes must be discussed and agreed upon by all and must be effected across the board with no one being exempted. The most important thing is to let everyone see the need for such changes.

  • Downsize Where Necessary 

Rather than having more hands do the same tasks, which is costlier, you can downsize the workers. Although, this might not mean outright firing, because in a difficult time like this leaders must show empathy and leadership. Workers might be split into shifts and skips. For instance, in a place where there are ten workers, you can make five workers work in the first two weeks while the second group will work the next. The most important thing is to make a workable arrangement that will be favourable to all. 

Conclusion 

Cutting costs is pivotal in staying afloat as a company during the recession. However, it requires you to be strategic about it otherwise it might end up being counterproductive. Therefore, this article identified ways to get it done. First, reduce working hours to get more done while saving much in the long run. Second, shut down unproductive operations; third, shun flamboyance and stay on low but get and fourth, eliminate needles allowances. Finally, downsize where necessary. Featured Image Source: Toppr
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This article was first published on 5th August 2022

nnaemeka-emmanuel

Nnaemeka is an academic scholar with a degree in History and International Studies from the University of Nigeria, Nsukka. He is also a creative writer, content creator, storyteller, and social analyst.

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