2023 was a year of corporate layoffs—Uber, Ford, Goldman Sachs, and Oracle, to name a few. Companies announced job cuts affecting 721,677 employees, and more could be on the horizon.
After the pandemic, businesses pivoted to an aggressive form of digital operations, primarily out of necessity. Workers were remote, online shopping for goods and services grew exponentially, and digital marketing opportunities were booming. To manage these changes, businesses ramped up hiring. Now, as the economy shifts, we’re seeing a release of these workers.
The will-it, won’t-it theme of the recession is on every business leader’s mind, and it seems like companies are looking for savings anywhere they can find it, including making some hard choices about staffing. However, there might be a more effective way to save money during economic downturns—and it doesn’t involve losing your staff.
Enter: operational efficiencies.
What are Operational Efficiencies & Why Should You Care?
Operational efficiencies are the steps that organizations can take to reduce resources while still serving the business. So, what does that actually mean for your business? You can achieve operational efficiency by streamlining base operations so you waste as few resources as possible, effectively cutting your costs and increasing your profits.
It’s all about ratios
The key to achieving operational efficiency is balancing your input:output ratio.
Input is what you need to operate, i.e., your staff, production costs, and time.
Output is what you gain, i.e., quality service or products, customer retention, and revenue.
To make a profit, your input should be less than your output. Sounds easy enough, but many influences affect your overall ratio—costs aren’t the only factor.
Optimize Your Resources
From a strictly cost-savings perspective, cutting headcount can seem like the most effective way of saving money. However, there are lingering impacts that come with this decision. You risk downgrading your products or services with sweeping changes to save money in the short term. Over time, you could impact the quality of your goods or services, decreasing customer satisfaction and ultimately decreasing profitability.
On the other hand, since operational efficiencies begin at the strategic level, they eliminate that risk. Instead, they deliver the same high-quality goods or services at a much lower cost to your business by optimizing your existing resources. Although every business is different and requires individual consideration, here are four examples of operational efficiencies that might be missing from your business strategy.
4 Examples of Operational Efficiencies You Could Use Today:
1. Streamlined App Development
How often do you get to the end of a project, and the result is…far from what you expected? Whether it is wildly out of scope or no longer aligned with the original vision, the project likely went off track during the development stage. By creating more agile workflows that can account for inevitable changes, you can save money by cutting down on revision_1, _2, _3, and ultimately increase your time-to-market.
2. Strong Recruitment Process
Your team’s efficiency begins with who and how you hire. You need a solid hiring process to avoid productivity dips due to low headcount or wasted dollars spent on poor retention rates. Implementing a strategy from interviewing through onboarding enables you to hire the right candidate right when you need them.
3. AI for Contact Centers
AI is here to stay, and companies that can integrate it into their processes will stand apart from their competition. AI can be a helpful tool for getting baseline information out to your customers quickly. Look into chatbots as an initial touchpoint to help deliver information and assistance to your customers when they need it most, speeding up your sales process and boosting positive experiences.
4. Data Warehousing
Your company runs on data—or at least it should. By effectively generating, storing, and analyzing data, you can utilize valuable insights to inform every key business strategy, eliminating wasted resources and boosting smart-decision making. Being a data-driven company is no longer a forward-thinking idea; it’s quickly becoming a business necessity.
Implementing operational efficiencies is one way businesses can save money in the midst of an uncertain economy. However, it takes foresight, planning, and strategic know-how to ensure you aren’t stripping quality from your products or services or decimating customer experiences.
Our team at Evergreen helps organizations like yours optimize their resources to navigate these economic changes, resulting in a more efficient and profitable business for you and your staff.
Want to save more time and money? Reach out to our experts below, and let’s start building today: