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Cost control, by engaging employees

What are some companies' experiences in increasing cost control by motivating employees to spend smarter on expenses? More specifically, some experts say that travel policies and vendor agreements are limited in the cost savings that they can achieve for companies and propose that improving employee spending behavior is the new frontier in travel cost savings. Is this type of cost control a reality yet in any of your companies?

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

No silver bullet. The correct answer is "old school."

The standard approach - establish spending policies and procedures; implement a Communications campaign to let employees know that cost control is important; and, require sign-off by Managers for any expenses. You can establish different approval levels based on the spend. But they must be applied consistently.

The greatest reason spending controls fail is that employees perceive (perception is reality) that Managers do not abide by the same policies; or they have different policies; or they will approval anything as they disagree with the company policy.

The best way to impact the employee population is for Managers to lead by example.

Ernie Humphrey CTP
Title: CEO & COO
Company: Treasury Careers
LinkedIn Profile
(CEO & COO, Treasury Careers) |

I agree with Regis that managers lead by example, and it is also part of the company culture. When I worked in manufacturing from day one I was taught to spend money like it was my own. I was told that I was making purchasing decision to ask myself "Would I spend my money this was way". Also, if people do Indulge on the "company dime" they need to be called out on it, even if it is the CEO.

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