Cost reduction is the process used by companies to reduce costs and increase profits. It involves strategies that depend on the company's products and services, and every decision in product development affects costs. HR can help reduce costs through strategies like hiring and retaining top talent to reduce turnover costs, improving training and mentoring to prevent issues, automating manual processes, offering flexible benefits to attract workers, reducing workplace risks, and outsourcing some HR functions.

2. Cost reduction is the process
used by companies to reduce
their costs and increase their
profits. (Bryan K. Parks)
Depending on a company’s service or product, the
strategies can vary. Every decision in the product
development process affects cost.

7. Source: University of Michigan Business School

8. The Role of HR
PeopleProcesses
Future / Strategic Focus
Day to Day Operational Focus
Strategic Partner
• Strategic HR Planning
• HR as Business Partner
• Culture and Image
Change Agent
• Staffing
• Organizational design
• Survey action planning
• Performance measurement
• Training and development
Employee Relations
Expert
• Employee relations
• Labor relations
• Safety & workers’ compensation
• Diversity and Employee Engagement
Administrative
Expert
• Compensation
• Benefits
• HR information systems
• Compliance

9. Efficiency
• Time to Hire
• Cost per Hire
• Headcount Ratio
Effectiveness
• Customer Survey
• “At the Table”
• Practice/Process Impact
Efficiency
• Direct Labor Costs
• Indirect Labor Costs
• Positions Unfilled
Effectiveness
• Employee Satisfaction
• Leadership Capability
• Talent Retention
• % Black Belt Leaders
• Employer Brand
Efficiency
• Cost per Unit
• Shrinkage
• Defects/Scrap
Effectiveness
• Customer Satisfaction
• Revenue Growth
• Market Share
OrganizationHR People
Metrics Model
Source: Patrick Wright

10. Success = Intelligence + Access
Source: Steve Miranda
Investment
=
Efektif
Return of Investment
=
Efisien

11. 1.Hire & Retain “A” Players. High turnover rates can result in considerable costs in lost
productivity and training. In fact, for every $10,000 in salary of a departed key employee, the
employer loses about six days of productivity. To avoid high turnover without increasing costs
significantly, conduct ongoing evaluations of employee satisfaction and provide non-monetary
benefits to make employees happy.
2.Improve Training And Mentoring. Appropriate training and mentoring is key to reducing costs.
One common issue is appointing a supervisor with poor or no training, which can cause difficult
internal issues. Supervisors need to train employees in customer service as client satisfaction can
affect performance and revenue. In addition, supervisors should cross train all employees so that
when someone is on vacation or on sick leave, another employee can fill in effectively.
3.Automate Processes. Another cost-saving strategy is automating manual processes. Providing
an employee portal can help streamline processes related to employee requests. In addition,
digitizing documents such as employee handbooks can eliminate copying costs and make
distribution easier.
Sumber: Total HR Management

12. 4. Get Creative. As discussed in a previous post, is salary intelligence everything? Work-life balance
can be as strong a motivator, in many instances, as money. Consider less traditional workplace
options that may affect the bottom line.  Flexy time, Flexy Benefit, etc
5. Implement Methods to Reduce Risk. The extra effort is worthwhile: The Harvard Business
Review estimates reducing significant risk — including employee accidents and office theft — could
save businesses $85 billion.  Employee education for medical and safety awareness (HSE) and
Fraud preventive procedures.
6. Consider Outsourcing Services. Nearly six out of 10 organizations have moved some in-house
HR functions to an external service provider, according to the Society for Human Resource
Management’s study. The global membership organization’s research found that operation cost
reduction was one of the most common reasons for outsourcing HR functions; 31 percent of
organizations said it had helped them attain a cost savings.
Sumber: Total HR Management

13. Productivity
=
Cost Efficiency