December 1, 2021
A company’s benefits package can be a very significant part of its total expenses, but in many companies, benefits are not really viewed as expenses. Instead, because of the need to hire and retain top-quality employees, the benefits package is considered a key asset that must be maintained if not increased. While a rich package can certainly be an exceptional tool in the race to acquire the best and the brightest, it is also sometimes viewed as an entitlement that is absolutely, positively never reduced. The correct view of a benefits package is that, irrespective of its worth, it is still an expense and therefore must be carefully managed.
Most of the cost savings to be gleaned from the benefits area apply to specific types of benefits. However, it is also possible to strip some costs out of the administration of benefits.
Forms and FAQs:
One cost-saving measure is to convert all benefits-related forms and manuals to PDF files that can be posted on the corporate intranet site. In addition, the site can include a list of frequently asked questions (FAQs) and answers; both items prevent employees from having to contact the human resources staff for information.
There should be a single benefits package used throughout the company and a single set of procedures for administering it. By taking this approach, the human resources staff needs to be trained on only one benefits package. Also, it may be possible to centrally administer benefits from a single location, which reduces the amount of administration personnel who need to be involved in outlying locations. Thus, benefits standardization can significantly streamline the administrative staff.
Some employees obtain bulk of their insurance benefits through their spouse’s employer. If so, they may prefer an alternative to their standard benefits package. A common trade-off is to give them extra vacation time. By doing so, the company exchanges the “hard” costs of benefits avoided for vacation time that can be scheduled so that it does not require additional paid staff to fill in during an absence. This is a clear win for both parties.
February 1, 2022
Email Etiquette: Taming the Beast
“Because the mail never stops, Jerry! It just keeps coming and coming and coming, there’s never a let-up. It’s relentless. Every day it piles up more and more and more, and you gotta get it out but the more you get it out the more it keeps coming in!” -Newman, Seinfeld Most executives I know …Read
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Don’t Lose Customers, Forge Elite Teams Instead
I’ve been a loyal Starbucks customer for 20+ years, mainly because of the consistency in their service and product. However, one of the locations close to me nowadays is a true test of patience; horrible attitude towards customers, lack of consistency in drinks and, worst of all, employees backbiting about each other, their superiors, and …Read
December 15, 2021
Negotiating with Suppliers The approach to negotiating with your suppliers is simple: treat them as your partners, be tough but fair, and don’t lock yourself in a situation that is impossible to walk away from. 1. Understand the balance of power: Understanding and playing the balance of power between buyer and supplier is a key …Read
November 15, 2021
Strong leadership is a prerequisite for good cost management. Cost leadership starts with the CEO or business unit head and cascades down through the top management team. They need to build a tough cost culture and be good role models in their personal behavior. They need two key staff functions to be very active supporters …Read
November 1, 2021
“If the company’s problem did not lie in revenues, it could only stem from expenses.” -Carlos Brito, AB InBev Simply put, Zero-Based Budgeting (ZBB) is a radical cost-control program that foresees a complete annual revision of all the company’s spending. In zero-based budgeting, managers are responsible for creating their budget from “zero costs” every year, …Read
October 15, 2021
HIRING & FIRING
People Cost The cost of people is the most difficult cost to manage. Because it is so tricky it is usually left until last in any cost-cutting program and any discussion of cost management. Why is people cost so problematic? First, people cost is very sticky. Once people are on the payroll it’s hard to …Read
October 1, 2021
Workers’ Compensation Insurance There are a number of techniques for bringing about modest reductions in the cost of workers’ compensation insurance. Job Classifications: One of the key determinants of the cost of workers’ compensation insurance is the job classifications into which all employees are slotted. An employee designated in a high-risk classification will cost far …Read