Maintaining Efficiency, Despite Corporate Cutbacks

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					 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
				
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