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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 …

“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, …

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 …

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 …