Cut Back Over $10 Million From Company's Budget

jimlegal

[font size="1" color="#FF0000"]LAST EDITED ON 05-14-03 AT 02:15PM (CST)[/font][p][font size="1" color="#FF0000"]LAST EDITED ON 05-14-03 AT 02:13 PM (CST)[/font]

Dear forum participants, again I need your help. Yesterday, I was assigned the difficult task to cut over $10 million from our company's budget. x:-( This is approximately one half of the budget we had for last year. We are an employees union with approximately 70 employees. It is my goal to recomend cut backs in "every area", before having to look at releasing employees. If anyone has any experience in this area, I would greatly appreciate a response! I am open to all suggestions, no suggestion will be considered to big or to small.:-? Any and all suggestions, comments and opinions would be greatly appreciated.

cebudragonlady

1. Get aggressive with your vendors. Aim for better prices at same quality.
Switch vendors if need be. Aim for better discounts and terms.
2. Get better rates of insurance by shopping around. Health insurance -
may raise employee co-pay. Workers Comp - try a different carrier. Employment
Practices insurance - keep your handbook & safety program up to date.
Vehicle insurance - lower the deductibles.
3. Install timers on heating/AC systems. Install motion detector lights in
offices to minimize use. Use employees to do maintenance rather than going
to outside. Use both sides of paper in in-house printing - that saves a lot!
4. No hourly overtime - which will also reduce Workers Comp insurance costs.
5. Office telephones can be programmed to call only certain authorized numbers.
( I was at a company back in the early-80's that did this )
6. Recycle steel, pallet and cardboard.
7. Have a meeting to explain Company's situation with employees !
8. Company should aim for company credit cards at lowest rates of interest.
9. Company should aim for lowest bank fees on checking accounts.Try for zero!

Been there in your siuation.

Chari

njjel

In addition to the above excellent suggestions, you may also want to consider asking for volunteers to go on a 4-day work week with reduced pay. Or for others to take off the summer (go on unemployment for that time). Cut all but abosolutely necessary travel and training expenses. However, $10 million is a BIG cut. Good luck to you.

sandra_d

Regarding benefits, perhaps cutting a day or two or three from your vacation/PTO accruals (if they are at all generous) could help save some money.

If you do have to reduce staff hours, ask if anyone wants to voluntarily reduce by 5 or 10 (or whatever) hours a week ... we're approaching summer, and maybe there will be people who would be willing to cut back their hours and have a bit more free time if it meant saving their job (or someone elses).

I've also seen across-the-board pay cuts of perhaps 5%, the elimination, freezing of, or significant reduction in one or more benefits (health, PTO, etc.), and if closing your office early would save you money in heating/cooling/or other expenses, perhaps closing early on Fridays or opening late on Mondays would be a "perk" that might off-set other negative things that may need to be implemented.

These are all "small" things, but I've seen small things add up quickly. Good luck to you!

lee2

Meet with employees, spell out the situation, ask for ideas, continue to meet as ideas are evaluated and implemented. Keeping employees involved not only makes sense from a morale perspective, they often have excellent ideas.

jimlegal

Thanks for all of the suggestions and comments received. You have been very helpful. I am still open for any additional comments or suggestions, so please feel free to add to this thread!

mbeam

To aid in the decision would also ask what the expectation/list of priorities for your team will be for the following year. This should help decide what areas will be the pressure points and allow you to pick those best suited to make it happen.

Also agree with the comments about communicating with your team as soon as possible. They do have very good ideas. However, be careful not to raise their hopes either - the situation you're describing with the budget cut as deep as you have, it is likely that you will lose team members.