Containing Costs and Maintaining Morale

Are you struggling to contain costs in this recessionary economy? If you're having a hard time withdrawing perks from hard-working employees, because you're afraid of the effect on morale, this executive's strategy may work for you.

James could see that the generosity his 200-member accounting firm had shown their partners and managers - when times were good - simply had to change.

The firm could no longer support the expensive valet parking the partners blithely added to their expense reports or the extra charges for breakfast that showed up on their hotel bills. Especially when James knew personally that the hotel in question included a fine breakfast buffet with the cost of the room.

James, a founding partner of the firm and a habitually conservative spender, always allowed time to park in the same airport shuttle lot, whether he was taking his family on vacation or going on a necessary business trip. He fumed to himself as he reviewed expense reports from the firm's tax meeting. The nine-dollar charges for breakfast were especially irritating, because he had noticed that those managers were not in the dining room while he was there himself enjoying the complementary buffet.

In good times, while struggling to retain employees who are constantly being lured away by other opportunities, it seemed picky to disallow those expenses. Now, with the decreased workload, the firm was overstaffed and he was struggling to avoid layoffs. Yet he suspected that his people would grumble at the now necessary restrictions.

Knowing how he had once struggled to overcome a reputation for insensitivity, he decided on a creative solution. He sent out a memo to all managers and partners explaining the need to cut expenses and asked them to each submit at least one idea that would save the company money.

In came suggestions to eliminate valet parking, to eat their meals provided by the hotel, to limit extra baggage charges (for golf clubs) when meeting at resort locations, to limit charges for laundry at hotels, etc. He compiled the suggestions and recirculated them with thanks. There was no resistance when those suggestions were instituted as the new company policy.

When I asked James how he was viewed in the firm, he said he thinks he is seen as a practical pragmatist and appropriate person. He did add wryly that a few people in the firm probably wished there was not a practical, pragmatic, appropriate person around to rain on their parade.

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Containing Costs and Maintaining Morale