The economy is finally showing signs of life; although as we mentioned in our last post, recovery is likely to be a slow process. As America recovers from the recession, businesses may find themselves trapped between wary consumers on one side and skittish bankers on the other, further slowing economic recovery. A continued lag in spending and lending means that belt-tightening will remain the norm for at least the next six to 12 months if businesses are to stay competitive and, in some cases, survive.
In an informal poll conducted last month, Manufacturing & Technology eJournal readers said they planned to rely on a variety of cost-cutting measures over the next year to maintain their competitiveness (click the link above for complete survey results):
- 36% expand territory
- 32% seek cost reductions from existing vendors
- 24% eliminate underperforming products/services
- 24% employee layoffs
- 21% reduce salaries or work days
- 12.5% seek work closer to home
Turning to your own workers for suggestions on how to increase cost-saving measures has proved a successful tactic in many industries during the recession. While concessions made by auto workers and airline employees have garnered the lion’s share of the headlines, workers in nearly every industry and business field have agreed to cut salaries, decrease work hours or forego benefits in order to maintain the solvency of their employer and keep their jobs.
It’s all about sharing the load and allowing workers to buy into the decision-making process. Workers express greater support for solutions they have helped create. And they’re more likely to embrace cost-cutting measures — and exert peer pressure on fellow employees to toe the line — when they feel:
- Their efforts will have a direct impact on solving the problem.
- More people will be able to keep their jobs because of the sacrifices they are making.
- The burden is being shared equally by workers and management.
That last point may be the most critical. We’ll look at why next time.