Cost control versus support: striking the right balance

Is money too tight to mention? Are relocation support services suffering? The time has come to rethink the emphasis on cost control at the expense of employee support. The right balance is needed to ensure efficiency and effectiveness. Sue Shortland explains.

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Is money too tight to mention? Are relocation support services suffering? The time has come to rethink the emphasis on cost control at the expense of employee support. The right balance is needed to ensure efficiency and effectiveness. Sue Shortland explains.In the current economic squeeze, we are all only too familiar with tight budgets and the need to do more with less. Budgets are being cut continually, and cost reduction has become the mantra of business activities.In today’s cost-conscious world, and with the economic slowdown, it might be argued that employees are lucky to have a job. Why should money be spent on employee support services? After all, this adds to expenditure and reduces cost efficiency. Potentially, this can lead to firms being uncompetitive, as they are unable to match or undercut the prices of their competitors.Of course, this viewpoint is simplistic. Your competition may be able to reduce their costs and prices to consumers not through clandestine (or even savage) cuts to employee support; in fact, investment may well be being made in this area, with the improved productivity flowing from support services translating into greater efficiencies that can be passed on to customers. Keeping pace with the competition involves benchmarking to establish the most appropriate course of action.So, rather than struggle with tight budgets, the focus needs to shift to setting SMART budgets:
  • Specific – look for sensible savings
  • Measure – find the maximum outcome
  • Achievable – ensure the actions you propose are affordable
  • Realistic – think of employee reactions
  • Time-scaled – think long-term, not just short-term
Remember that cutting costs can result in unintended outcomes; if the relocation policy elements do not attract, motivate and retain staff, but instead result in disengaged employees and unhappy families, the money spent is simply money wasted. Employee productivity and commitment will fall, and this is unlikely to result in your organisation shaping up well against the competition.While it is important to ensure that the maximum benefit can be achieved from any expenditure made, when too much trimming negates the value of the benefit, all is lost. For example, if what appear to be achievable policy element reductions result in loss of staff mobility, is that really an affordable and acceptable outcome? Most likely not.So think of the reactions of employees. For instance, trimming back payments of school fees in international relocation policy appears, on the surface, to be an easy-to-implement cost saving. Yet it can amount to ‘the straw that broke the camel’s back’ and can lead to assignment refusals. Certain benefits may not be the most expensive elements in the relocation package, but their value to employees and their families far exceeds the financial outlay.Employee support: the smart optionIt is also important to think ahead. What will happen when the economy enters recovery? Engaged employees are likely to remain with their employers; the disengaged will not – resulting in labour turnover costs most likely far exceeding savings made previously.The arguments against providing employee and family support for relocating individuals and their families – in both domestic and international contexts – may go beyond money. Support provision can be time-consuming (but then time is money!). In-house staff may be too stretched to deal with relocation support – the ‘soft’ aspects, such as dual careers, children’s concerns, finding homes and schools, and so on.The view may be taken that employees who are being relocated are adults, not children; they can take care of these factors themselves. But these issues are not ‘soft’ to employees – rather, they are critical to mobility; they are also difficult to handle while being expected to deliver 100 per cent in the workplace, especially if the relocation involves moving abroad and dealing with the associated unfamiliarity of foreign labour, housing and education markets.Outsourcing does provide a solution for time-pressed company personnel – but this costs money, and the agency must be briefed effectively (requiring time). Yet if a cost-benefit analysis is conducted, time and money spent on employee support (either in-house or via outsourcing) are critical to raising productivity and ensuring that employees and their families give their best to the organisation.Little things go a long way, and practical employee support is more valuable than throwing money at a problem. Support provision indicates that the organisation cares about its people; this leads to improved morale, productivity, engagement and commitment. And this pays off – in both the short term and the long term. So think ‘support’, and outsmart your competition.