Just a couple of examples of why you shouldn't cut back on all types of spending. These are real-time examples of things that I have encountered in the past week. They both stood out to me as high-level examples of why cutting back on all spending isn't always a great idea-
1 - Cutting back on staff training
My current employer has recently opened a new store. To keep costs to a minimum, they decided that training for staff on areas like the tills was an unnecessary cost and that using the experienced management team in the store to train "on-the-job" was the best way to go. The management team were to supervise in the early weeks and ensure that any problems were rectified and any training issues identified and acted upon across the whole team. The issue with this is that not every possible problem or issue on a till would necessarily crop up withing the first few weeks of trading.
There was a customer who bought an item through our online service. This has the option to return to store for a refund. The customer made this visit to the store for a refund, where the till automatically refunded the customer her payment onto her original payment method (Paypal in this instance.) As the till message was not particularly clear, the cashier then proceeded to refund the customer money directly on to her credit card. The resulting near-£200 loss and the resulting hours lost by management and the online team trying to recover this would have easily paid for a training session on the tills for the new starters prior to the store being opened.
2 - Cutting back on security staff
Same employer, same store have decided not to employ a security guard to cut costs, even though the company would usually have one in a store of that size. One customer took well over £3,000 in 3 visits to the store, as a result of the lack of security guard and the low level of staffing at certain times of the day. This is one of 10 reported shoplifting incidents over a 6 week period. Add to this the time it takes for management to inform staff, work through CCTV, report the crime to the Police, give statements, etc then add to this the unreported, undetected shoplifts then we could have paid for a guard for those 6 weeks and much more.
These are 2 small examples of where cutting spending can have a negative effect on income, expenditure and staff morale. Think carefully before cutting back on an expense, as it may save more than it costs.
Thanks for reading!
Some things you can't buy on the High Street - Kindle edition of Twelve Years a Slave