ERM & Internal Controls
Maintaining Efficiency, Despite Corporate Cutbacks
By Jaclyn Jaeger result, Shah said, companies are “penal- “X-ray analysis”—a methodology that
izing” their most pivotal employees— provides an objective analysis of an or-
T he phrase “doing more with less”
sounds like a wise, if unwanted,
business policy these days—right up
the ones most important to creating and
preserving wealth, and the ones compa-
nies most need during difficult times. To
ganization’s general and administrative
processes (human resources, IT, finance,
and so forth) and labor costs based on
until reckless cost-cutting alienates em- execute cutbacks more deliberately, PwC actual time spent on specific processes
ployees and weakens carefully crafted recommends companies begin with an by role.
segregation of duties. assessment of the following questions: Ideally, that study should yield a
In a prolonged recession, companies detailed map of where employees de-
“want to make more thoughtful and » How can effectiveness and efficien- vote their time, and where fragmented
strategic decisions to respond to these cy of workforce be improved? processes exist, Shah said. That will let
ongoing pressures,” Nik executives see whether roles and respon-
Shah, a partner with » What should be outsourced, instead sibilities are assigned appropriately, and
PricewaterhouseCoo- of done internally? how they could be consolidated with
pers, said during a re- minimal disruption to the employees
cent Webcast exploring » What staffing mix of permanent who remain. It should also help execu-
the risks of cost-cutting and part-time labor will allow the tives understand staffing levels overall,
plans. “We believe that greatest level of flexibility while re- IT infrastructure requirements, and
doing more with less is ducing cost? cost-saving options.
the new normal.” “The ability to get the right people
The problem: while Shah » What should be automated instead at the right place at the right time has
many companies are of performed manually? never been so important for organiza-
cutting jobs or imposing hiring freezes,
they’re not eliminating the work. As a PwC has dubbed such assessments an Continued on Page 70
LABOR PAINS
Industry Data From PwC’s 2009/2010 Human Capital Report
—Labor Cost: Single largest expense item for most industries
—How is Labor Cost (as a % of Op Ex & Revenue) trending in your organizati