Tips on cutting costs

So you're growing your business. It's funny how you run into obstacles you didn't think much about when you started--especially when you start needing to hire help. Here's an item called "How Entrepreneurs of Small and Mid-Sized Companies Can Maximize Their Human Capital without Exorbitant Overhead." It describes a white paper on cutting costs, and thanks to Asset Design Center for sending the heads-up.

"...the premise that entrepreneurs, like most people, prefer to do what they're best at, and that means focusing on their core business. Still, the
economics of profit and loss demand that entrepreneurs must deal with what many
view as a costly distraction -- the management of human capital and programs
that are crucial to the healthy life of the company.

Two components in particular are vital for keeping HR costs in line:

1. Increasing productivity

2. Minimizing human capital expenses

Then it gives 4 focus areas:

1. Hiring the right person for the position. Most companies hire on skill and fire on fit, but that's not the optimum strategy for keeping costs in check. To find top talent, it's necessary for companies to define "superior performance." They can then apply that definition to performance-based behavioral interviewing and other strategic recruiting techniques to attract the best candidates.

2. Improving performance with motivational yet balanced total compensation. A "balanced" total compensation model includes the need to leverage compensation surveys, implement pay-for-performance incentives, offer flexible work schedules, employ non-cash rewards, and motivate employees to find their own ways of cutting costs.

3. Complying with the law. Compliance boils down to not giving the IRS or any other government agency a reason to become interested in a company's activities. Important bases to cover include distinguishing between exempt and non-exempt employees, understanding the difference between full-time employees and independent contractors, and keeping in step with federal and state regulations that include everything from COBRA to ERISA.

4. Offer competitive benefits, communicated effectively. The standard list of benefit categories may look the same for small and large employers, but the plans, features, and services offered can be as different as black and white. A typical offering includes insurance coverage for medical, dental, and vision care as well as short- and long-term disability, life, accidental death & dismemberment (AD&D), and long-term care. For small employers, the level of benefits is generally much lower than that provided by large employers, the level of risk to the employer is much higher, and the cost per employee can be higher as well."

Get a copy of the paper here.