Cutting Expenses Without Cutting Employee Motivation and Morale

Most Businesses Make These Mistakes, Does Yours

When large businesses and corporations decide they need to cut spending, it often translates to a reduction in employee sentiment at the same time. Whether cuts are directed only at specific departments, or the company as a whole, it’s tough when you have to lower costs. Employees tend to feel the squeeze the most, and it can also be a demoralizing time particularly if there’s the fear of pending layoffs.

If you’re not planning layoffs, but you do want to lower costs, can you do without damaging employee relations?

The following are some things to help you address that objective.

Help Departments Stay Compliant

One thing that tends to frustrate employees the most when they’re in the midst of change is the feeling the company isn’t being transparent, or they don’t know what’s expected of them. When you’re in the middle of cutting expenses source the best expense management solutions to help employees stay aware of changes and compliant.

There may be different spending policies for various departments within the company or different expense category limits. When your business integrates a robust software solution, it’s easier not just to manage costs but for employees to remain on track and aware of what’s happening.

Making employees guess about anything is a surefire way to breed dissatisfaction.

Be Open and Honest

Along with utilizing expense management software, it’s always beneficial to have a general sense of openness and honesty when cuts have to be made. The less transparent an organization, the more it cultivates gossip and general mistrust, which leads to distracted, unhappy employees.

Ask For Employee Feedback

When companies start making cuts they rarely ask the people who know best where these changes can be made. Instead, executives make the decisions, and employees may be left feeling like they have no control and even that the cuts were made in the wrong places.

Employers should empower employees by asking for their ideas as to where costs can be lowered. It’s useful because you can get valuable feedback and also keep employees’ morale high.

Be Creative with Perks and Incentives

You want to keep employees feeling like they’re appreciated and recognized for their efforts, whether in terms of helping to cut costs, or otherwise. Even if your company’s budget isn’t huge at the moment, you can compensate them in other ways, for example, opportunities for a flexible work day or even just recognition of their efforts.

Perks and incentives don’t have to be monetary; there are plenty of creative ways to keep employees thriving even when you’re simultaneously focused on keeping costs down.

Finally, make sure that you’re cutting spending from the top down. One of the biggest mistakes a lot of large companies make is pushing employees and departments to reduce costs, while the example coming from executives is that they can still spend as usual. This is one of the top ways to make employees resentful and lose top talent in the meantime.

Executives and corporate leadership need to all share the burden that comes with cutting costs, in order to maintain a sense of high morale and motivation among employees.


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