What Budget Cuts Are Worth It?

When seeking to reduce costs in your company, what cuts may be painful, but worth it, and which cause more discomfort and loss of morale than they are worth? I repeatedly ask myself that as I wade through a career in the ailing publishing industry. Unlike my sister, who works for a large liquor distributor, I never have worked for a company flush with cash. Unlike liquor, the written word isn’t nearly as universally prized and sought after.

Financial struggles result in serious cuts, such as the loss of staff and salary freezes, and cuts with less serious repercussions but still cause employee disappointment and a loss of comfort and morale.

I found a piece online, published in 2010 by the American Psychological Association (APA), that’s still true seven years later. “Boosting Morale” by Amy Novotney notes tactics for increasing employee satisfaction, which may be needed as the austerity trend continues in many industries.

My company, for instance, just laid off a 70-year-old man who worked for about 25 years as our office and mail room manager. That’s a serious cut that’s disturbing. And then there are the sillier ways the company is seeking to offset costs, such as reducing the variety of coffee pods for our coffee machine, and reducing the number of milk cartons purchased each week. I always thought coffee was one of the few “luxuries” left to barebones companies. An information sheet was posted on our refrigerator a couple months ago detailing how long you can drink milk past its expiration date. An anonymous employee added her own note to the information sheet with a smiley face: “Thanks, but I’m not drinking spoiled milk.”

The elimination of job roles can save a company hundreds of thousands of dollars in salary and benefits, while reducing the number of coffee pods and milk purchased could save thousands of dollars. But the savings gained by reducing the enjoyment of employees’ morning cup of coffee may be offset by the message it sends to employees: that the company isn’t interested in keeping them comfortable. You want your employees to work hard and deliver for your customers, but most of us feel it’s a two-way street—we deliver for you if you deliver for us. Part of delivering for employees is payment of salary and benefits, but the other part is being treated in a way that makes us feel valued. A company that cuts the small niceties, and offers a barebones employment experience can expect a workforce that will deliver a barebones performance. We’ll do the minimum we need to do to keep receiving a paycheck and benefits, and little to no more.

Novotney, in her piece for the APA, advises that “time isn’t money” in thinking about how to boost employee morale. Let’s say you can’t help but cut jobs, and you even feel the need to ask your employees to put spoiled milk in their coffee. What if you balance out those points of discomfort with a more flexible schedule that allows employees to have more control over their lives? The workload remains the same, or greater, but employees, who are not customer-facing, can do their jobs from their living room or backyard patio. That doesn’t cost you any additional money. In fact, it actually may save you money in energy costs with fewer computers, and other appliances, such as printers, being used in the office. It also could save money on your water bill with fewer people using the toilets and sinks.

To take it further, you even could allow employees to apply for permanent work-from-home status, reducing your need for office space. To make sure it works for each employee, and department, you could require a probationary period of three to six months, in which the employee and her manager see whether the employee’s, or department’s, work suffers with the employee working from home. If there is no negative impact, then the arrangement becomes permanent, and you have one fewer employee to accommodate in your workspace.

I try never to tell people when I’m unhappy because so many treat unhappiness as something a person can control, and a negative commentary on a person’s character. Seeming to take a cue from that kind of thinking, Novotney notes the importance of “individual accountability” in creating a happy workforce. That means training your employees to take responsibility for their own on-the-job happiness. You can do that by training them to speak up when they’re unhappy, and to practice stress-reducing tactics.

It’s important to train employees to do their best to work on mutually beneficial arrangements between themselves and their employer, but I would tread carefully. You don’t want to create a workforce that’s borderline abusive in the amount of work, and austerity, employees are expected to endure, and then tell them it’s their own fault if they’re not happy.

Your employees have responsibilities you expect them to fulfill. You probably put those in writing, and judge employees against them each year. What are organizations’ responsibilities to employees? Is it just to pay them and provide the benefits that were promised? A workplace that shows employees you care about their comfort may deliver more of a return on investment than petty, yet painful, budget cuts.

What budget cuts did the most good at your company? How did you ensure those budget cuts did not adversely affect employee performance?


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