Managing Corporate Spending During A Crisis15 May, 2020 6:36 am
The Coronavirus pandemic, while being a healthcare disaster, has already had devastating effects on the global economy.
Experts believe that the world is headed for an unprecedented recession.
The ramifications of this recession will be felt across the world. Both developing and first world countries are seeing its impact across various sectors. As a result, small to mid-sized businesses in various countries have begun shutting their doors, laying off employees, and filing for bankruptcy. With manufacturing, sales, and marketing efforts, in the short term, at a stand-still, brands are predicting stagnant growth during the coming fiscal quarters.
Given that most of the world is under a lockdown, and customers not spending, businesses must now keep an eye on their spend, with a higher level of scrutiny.
During these testing times, two things are vital – one, curb expenses and two, ensure employee morale is continually high.
Set out below are two ideas on how businesses can employ better strategies to control corporate spending and boost employee engagement and productivity.
Re-Evaluating Spend Strategies
With most employees working from home, one could argue that corporates must now be spending less in terms of operational costs. Unfortunately, this may not be true. Businesses that reimburse employees for business related expenses are now seeing an increase in claims, because employees are having to set-up home offices; buy office equipment (such as workstations, chairs, and printers), and use high-speed internet connections for video calls, etc. In order to control this, companies will have to re-look at their employee benefits strategy and tweak the same, to match the current environment.
To identify the changes that you must make to your strategies, you must start by simulating various scenarios about how expenses could happen, and then plan based on the outcomes, including your response(s). This will help you identify the biggest possible drains on company finances and, therefore, the measures that you can employ to curb them.
Covid-19 is here to stay. Thus, when businesses do open again, you must plan for additional expenses for all work-related travel, so that you can safeguard the health of your employees. You may have to prioritise private modes of transport like cabs over flights, trains and buses, wherever applicable. With the travel and hospitality industry taking such a hit, you can also expect higher room tariffs at hotels in the future, which will also add to the cost. Based on such factors, you may have to re-evaluate your reimbursement policies and see where you can judiciously cut costs.
Finally, to ensure that each reimbursement claim meets the parameters set out by the company, you must use a reliable expense tracking app. Doing so would also reduce the need for a dedicated finance team to compile expense data. Indeed, this change will not only reduce the paper you handle (another cost reduced), but also speed up reimbursement (motivate employees), and also increase the overall transparency when expenses are filed.
Ensuring Employee Engagement During A Crisis
Employee engagement has been a key focus for most corporates over the last few years. However, with most people now working remotely from home, boosting engagement and morale will become quite challenging. Hence, it is absolutely vital for companies to ensure that the engagement with employees is not given a short shrift, and therefore compromised.
While curbing expenses is vital, it is also necessary that you take steps to explain to employees why these measures are being taken. With their cooperation and understanding, you can ensure that productivity does not get compromised in the coming months. After all, it is in these times that you must take all steps to ascertain that your business is running smoother than ever.
As these are unprecedented times, where limited information is not helping businesses to gauge or understand the true impact of Covid-19 on the economy, curbing expenses and keeping morale up, are two critical tasks which each business must focus on.