Cost Cutting Incentives for Employees

It is vital for a business to cut costs, especially during such economic recession as we have now.  Even in a good economy, cutting costs can really make a big difference in the bottom line.  An over looked investment strategy for businesses is to save money on expenses.

The gatekeepers for your company expenses are your employees.  Here are some ways to give your employees an incentive to help your company cut those costs down.

One of the best ways to cut costs is to let your employees do it for you.  One of the downsides of having employees is that they don't have as much ownership in your company than you do as an owner.  The same is true if you are the head of a department.  In order to bring your costs down and to get your employees to help you is to give them ownership.

A good way to do that is to reward them for cost savings that they produce.  For example, if your administrative assistant finds a better deal on cleaning supplies than the ones your are buying now, make sure that you give them back a percentage of the savings.

That way, they are getting a financial benefit for helping you save money.  In the end, you will save more money on expenses while giving your employees an opportunity to make a bit of extra money on the side.

What your incentives actually are have to be calculated based on your own situation.  But let me give you a couple of other examples.

Maybe you can make certain employees in charge of cutting costs in different areas.  You give make one employee in charge of the electric bill, another the office supplies and maybe another over travel expenses.  Then after the end of each quarter, you can compare with the quarter from the previous year and give them a percentage based on how much you reduced costs.

It might take a bit of work to do this.  You can even make one of your managers or supervisor in charge of this project and give them a cut of the overall savings.

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