Many companies rightly focus on important things like employee productivity, customer satisfaction, and strategic planning when looking to tighten up the budget. But without proper financial oversight, there are other things that will silently drain your businesses’ budget.
Inefficient processes are one of the biggest drains on a business’ time, productivity, and performance and directly impact both customers and employees in negative ways. For instance, one slow process in checkout could increase customer dissatisfaction and employee frustration levels. On a higher level, management often wastes their time trying to ineffectively deal with inefficient processes. This may appear in the form of constant mandatory meetings, or unrealistic strategic goals. It may also appear in the form of poorly designed service or production practices that are process driven, not results driven. Companies can overcome inefficient processes through quality and improvement programs, as well as incorporating technology into business processes.
Every employee that quits may cost up to a few thousand dollars in the form of posting, screening, hiring, and training a new replacement. Companies that consider employees to be just human resources may be in for a rude awakening when their workforce starts to quit. Research continually shows that employee satisfaction levels are directly connected to their level of loyalty and engagement. The more a company invests in their employees, the more they will invest in their company. Reducing employee turnover is possible through cultivating a culture that values diversity, innovation, and employee contributions. Management can increase employee engagement through empowering employees to improve work processes and offering career advancement opportunities. As a final note, companies can increase employee morale through offering meaningful benefits, such as casual Fridays, free lunches, or flexible scheduling.
Industrial based companies often have enormous maintenance costs. This is especially true for manufacturing based companies that rely on things like forklifts and conveyor belts to process products. When these break down, the company must not only pay for repair costs, but will lose a potentially large amount of money from downtime. Some experts estimate that every minute of downtime in a small company may cost from a hundred, to thousands of dollars a minute. The preventative maintenance programs for equipment and machinery you have in place are necessary, but also very expensive. Repairs can also drastically drain an office-based companies’ budget. Consider the fact that calling an IT or copy machine repair tech may cost hundreds of dollars each visit. You might prefer to rely on a designated third party hardware maintenance service like Virtual Technology to take care of repair and maintenance needs.
Your company has to find ways to save money and cut expensive costs. Use these ideas to make sure you aren’t getting drained in one area.