HR’s Role in Cost Reduction and Optimisation

Driving enterprise-wide cost optimisation

HR often has to make ad hoc cost-cutting requests

As the demand to deliver high-value services increases in tandem with the need to drive productivity, cost optimisation remains high on the list of priorities for 92% of HR functions. However, HR leaders often respond to ad hoc cost reduction requests, leading to unintended consequences for the business.

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    We have a relentless focus on doing what really matters [and getting] good data as to costs and how they link to the business strategy.
    Head of Talent Management, Fortune 500 Company

    Cost optimisation goes beyond cost cutting

    To maximise cost savings, HR leaders should pursue cost optimisation through both function-specific and enterprise wide programmes. Cost optimisation is a business-focused, continuous discipline intended to maximise business value while reducing costs.

    Graphic displaying how to drive HR cost optimisation across the enterprise.

    Insights you can use

    From helping HR functions drive baseline efficiencies to creating a sustainable cost optimisation roadmap, Gartner makes sure that cost optimisation is an ongoing, strategic discipline rather than an emergency-driven project or one-time undertaking.

    How to Prioritise HR Cost Optimisation Initiatives

    Cost optimisation efforts fail to yield their full potential when they are not systematically evaluated. Good cost reduction decisions require a clear and rigorous business-driven understanding of the relative investment, risk, time, impact and benefits of potential cost optimisation initiatives.

    What Employees Really Think About Cost Management

    With nearly 80% of employees believing that their organisation is likely to reduce costs in the next 12 months, understanding their perceptions of past cost-cutting programmes helps HR plan future cost-saving initiatives and receive better workforce buy-in.

    Don't Forget About HR Structure

    HR leaders have increasingly applied more differentiated and specialised HR structures, but this has often resulted in conflict and duplication. CHROs must understand the tensions in different models, and tailor their structure based on their context, to deliver cost-optimised HR.

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    Gartner Topic Experts

    Gartner’s HR experts include more than 170 people worldwide. Meet a few of our leaders.

    Matthias Graf
    Sr Director Analyst

    Daniel Dirks
    Managing VP

    Seyda Berger-Böcker
    Director Analyst

    Piers Hudson
    Sr Director Analyst

    Josie Xing
    Sr Principal Analyst

    Esser Rizaoglu
    Director Analyst

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