Question

As a manager, you are tasked with cutting $100,000 from your department's budget next year. The department has $800,000 in personnel costs for staff, $150,000 of rent expenses, $125,000 of general administrative expenses allocated from the executive office, and $50,000 of miscellaneous office-supply expenses. The administrative expenses exist regardless of your department's size; if your department gives up office space, another department will take over the space and the cost.

List at least two cost-cutting measures you can adopt to save your organization (not just your department) $100,000?

Answer 1

Since the details like how many employees are there is not mentioned and the nature of the business is not known, the solution to this question is all pervasive. It could be used in multiple places.

In order to cut nearly $100000, the following measures can be undertaken:

1. Replace Personnel staff with other people

This is a measure that is gaining a lot of attention lately. In this method the organisation removes the permanent staff who are professionals and replace them with others. Their can be carried out by people who are indirectly related to the company.

2. Lower Supply cost:

This is the result of reduced personnel staff as people who are working as outsourced members do not have high requirements as that of a full time employee.

3. Lowering the Personnel cost:

The objective of the company is a priority. This can include cutting certain facilities available to employees, it is a trade-off made for ensuring uninterrupted flow of business activities. While this is initially seen as a negative move. The department should communicate that the move could be temporary in order to maintain decorum and work stability.

4. Using free space if available

Due to less employees there can be unused space which can be occupied. Other departments can be allowed to work for some rental charges or could be used to store office equipment as the intention mentioned in the above question is to save the organisation rather than just saving the department.

All these moves will keep away from giving office space to other department and ensure that the budget target is met.

Hope this answer your question...