Taking costs out of the business while nurturing talent and providing high quality services
The current economic climate increases the pressure on HR to
reduce its operating costs but also to assist the business in
reducing its people cost. People are often a company's single
biggest expense, accounting for up to 90% of the business'
operating cost and, now more than ever, businesses must ensure this
investment delivers value in the short, medium and long term.
There are two questions businesses should be asking right now:
- How can HR reduce its operating costs? Over the past decade many HR functions have made progress in streamlining their own processes and operations. In these cost-conscious times, they need to do more. Although HR's operating costs are typically just a small fraction of a company's total expenses, every little helps and deferring investments, ruthless prioritisation of activity and building a flexible model can allow HR to deliver essential cost reductions.
- How can HR support the business in reducing costs? HR should be using its expertise to help the business manage people-related issues. This may mean downsizing and rationalising elements of pay, but at the same time talent remains critical to a company's short term and long term success. The HR function must align the organisation's HR and talent strategies to inform and deliver the changing business requirements
For further information, download our report ' Reducing HR and people costs in consumer products'.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
