When asked about how companies are planning to reduce costs, a full 87% of respondents said they are considering improving efficiency to a moderate, high or very high degree. Seventy-one percent said they are considering cutting discretionary spending to the same degree, and 65% are considering seeking lower costs from vendors. By contrast, just 33% said their organizations are planning to reduce head count to the same degree.
The most likely cutback targets are operations, with 49% of companies reporting they are looking at reducing costs in this area. That's closely followed by administration, at 48%, and the use of external vendors/outsourced partners, at 43%. More than a third (35%) said they'd look to HR as a place for reducing costs. The least likely areas for cost-cutting measures are research and development, with just 19% of respondents saying their firms are - to a moderate, high or very high extent - planning to reduce costs in this area.
"In this uncertain economic environment, it's clear companies are intent on not being caught flat-footed," notes Kevin Oakes, CEO of i4cp, "but so far it's looking more like careful surgery than a bloodbath. Layoffs don't seem to be the first choice for a lot of companies."
Companies were also asked about tactics that are alternatives to conventional cost-cutting. Nearly three-quarters (73%) said they're planning to "design … new strategies to increase revenue" to a moderate, high or very high degree. Seventy percent plan to engage employees more effectively, and 68% are looking for new customer bases. Oakes notes, "Many business leaders are pretty canny about how to deal with a downturn. Raising productivity and designing new strategies to boost revenues are good business practices at any time, but economic slowdowns seem to kick this into gear for many organizations."
When asked about the degree to which certain types of products and/or services would best help them in the upcoming year, 61% said that - to a moderate, high or very high extent - they would benefit from "research that helps us anticipate future needs." A total of 56% cited research that will help them become better at strategic thinking, and 54% would like to see studies that show what other organizations are doing with regard to workforce management in challenging economic times.
The Cost Cutting Measures "Taking the Pulse" Survey polled 265 companies and was conducted by i4cp, in conjunction with HR.com in April 2008.
About i4cp, Inc.
i4cp is the world's largest private network of corporations focused on improving workforce productivity. Our vendor-free community facilitates innovation by giving our members - among the largest and most respected organizations in the world - access to:
- Peers to spark new ideas and prevent "reinventing the wheel"
- Research to enable members to understand current practices and next practices
- Tools to put ideas and research into action
- Technology to enable members to easily access tailored information and execute workforce strategies.
With more than 40 years of experience and the industry's largest team of human capital analysts, i4cp is the definitive destination for organizations seeking innovative ways to improve workforce productivity.