ORGANIZATION SIZE

Eliminate Open Positions

The quickest and easiest action to take to impact short-term cost reductions is to freeze hiring and eliminate open positions. Of course, this will only be a cost reduction if the positions were included in the budget. To cover the business need that probably does not go away as easily, you may need to reassign the employees, make organizational changes, re-prioritize through the governance process, change project schedules, or train employees. Therefore, even eliminating open positions has some costs or productivity hits associated with it.

Early Retirement

To avoid layoffs, many companies ask employees to consider retiring early with an additional monetary incentive. The advantages of this are that you do not need to pay unemployment costs and the cost of the incentive package is short term. There are difficulties when offering early retirement. The number of employees accepting the offer could be a drain on your pension plan and long-term individuals that take the offer and whose IT and business knowledge are valuable are difficult to replace. Today, many organizations are facing major training issues and turnover costs as the baby-boomer generation is leaving the work force. Additionally, employees with years of experience are not always willing to pass their knowledge on to a young replacement.

Schedule Changes

Investigate reducing the hours that you provide services in order to reduce wages. For example, if you have a 24/7 help desk, you could discuss options with the business to reduce costs and provide less coverage.

Consider shifting workers from full-time to part-time. This could be accomplished by either targeting job functions or by asking for volunteers. This option can be helpful as you retain the trained employees and re-engage them full-time, if necessary