How to reduce costs at the expense of administration and bureaucracy?
Reducing administration is an important task for small businesses that can bring a number of significant benefits. In smaller organizations with limited resources and budgets, excessive administration can mean wasted time, energy and money.
In this post, we will look at why and how to reduce the time spent on administration in employee-related activities in a small business, and what practical advantages this entails.
A small business can reduce costs in administration and bureaucracy in many ways, as well as in all processes related to People Management:
Focusing on the most important activities:
When times are difficult, very often Managers tend to save on certain budget lines, the temporary absence of which does not seem to cause much damage to the overall picture, as it seems at first. Such areas may include, for example, cutting costs related to Employee training, reducing Team events, etc. However, significant cost reductions in these areas can lead to problems with competitiveness, Employee motivation and retention, with very long-term implications for the entire Company. To avoid problems, we recommend reducing direct financial expenses to a certain extent, either by 30% or, in extreme cases, by 50%. Certainly, these areas should not be turned off and put on hold completely until times improve or more cash flow is created.
What to do? Map those skills and competencies that are most important to the continuity of the business. For example, knowledge of basic products, customer communication, as well as team supervision, cooperation skills, etc. You can also offer training to Employees internally by sharing knowledge and providing guidance, or by participating in free learning sessions, or by organizing joint gatherings in such a way that they do not require room rent, catering costs or other expensive paraphernalia. It is important to maintain consistency and find smart approaches to help you overcome difficult times. Employee experience is something that is created over a long period of time and will also be restored over a long period of time if not consistently addressed.
Simplifying work processes and evaluating efficiency:
If the company has been operating for a long time or has undergone major changes in recent years, such as growth or layoffs. Then it may happen that such processes, which seem to be in place and functioned without problems, also need to be reorganized. Work processes should be reviewed in the wind of major changes or as a preparation, but also every few years just to simplify and optimize them to suit today’s needs.
What to do? Review your company’s work processes and find ways to simplify them. This may include consolidating processes, eliminating excessive bureaucracy as much as possible, streamlining implementation, or speeding up the process for both Manager and Employee.
Many Companies have already moved to the point where, the Employment Contracts and all documents related to the Employment are formalized only in digital form. Documents are also stored digitally in a secure environment provided for this purpose. Yes, moving to fully digital Document Management takes some effort and a very clear vision, but it pays off in a relatively short period of time. This is both in terms of operational efficiency, data management and information availability.
What to do? Move from paper documents to digital solutions. Electronic documents and archives allow you to save time and money by reducing the cost of paper materials, among other things. In HR field you can start with new hires.
Smaller companies are often in a situation where employee-related activities are divided between different people. This can lead to fragmentation and a lack of overview of information, sometimes also errors, which are more difficult to detect in such an arrangement. Outsourcing HR services can be a strategic way for small businesses to achieve better efficiency and higher quality HR management, as well as significant cost savings. This allows the company to focus on its core business and let specialists take care of HR needs.
What to do? Consider using external services such as payroll or HR administration, HR management, recruiting. This can be more cost-effective than creating a permanent position or department.
Digital solutions and specially designed software, help simplify complex processes and automate them either partially or completely. As an Employer, a huge amount of time is spent every month on, for example, creating work schedules, managing vacations (many changes and coordination), administering trainings, as well as recruiting, which are extensive in terms of data and various activities. Well-chosen and user-friendly software (for Managers and Employees) can in some cases reduce the administration and time consumption of the entire process by as much as 80%. Which, in turn, is the kind of time that every Company can certainly use more profitably.
What to do? Use software and web applications to automate routine administrative processes such as vacation scheduling, requests and approvals, managing time information, tracking goals and metrics, and more. This reduces errors, increases efficiency and reduces the need for multiple administrative people or activities. In the case of smaller companies, it is definitely recommended to use cloud services, which are a more suitable option in terms of administration and maintenance costs than, for example, having something programmed and developed for yourself.
Normally the Managers take responsibility for budget preparation and the execution. What you should also think about is the possibility of using the valuable knowledge of your Employees. After all, Employees are the ones who are closest to the Customer and are the first to see problems. Similarly in many other important and time-consuming internal activities. The goal is not to prepare the Company’s budget by Employees, but to be included in discussions where it is necessary to find smart ways to save and increase efficiency.
What to do? Involve Employees in generating cost reduction ideas. They are often the first to spot opportunities to improve processes and cut bureaucracy.
In conclusion, there are a number of handy ways for a small business manager to cut costs from administration and bureaucracy. Smart technological solutions, effective work processes and focus on important activities help to increase the company’s efficiency and save costs.