How Much Does Cost Containment Cost?
Joel Elveson
I am defined by the successes of the clients and candidates I have helped.
How Much Does Cost Containment Cost?
By Joel Elveson, Featured Contributor
COST CONTAINMENT is a procedure used by many businesses to increase profits by reducing expenses. This in of itself does not sound overly ominous until you are fully aware of how much this initiative costs which cannot be measured in dollars and cents alone. The only way to even get a sense of the cost of cost containment is via usage of the word staggering.
I recently read an article on MSN which revealed that in the land of Mickey Mouse (M-I-C-K-E-Y M-O-U-S-E) aka Walt Disney were “repositioning” most of their IT/Tech Staff in favor of H1B holders whom they could pay less to. To add insult to injury Walt Disney had the chutzpah (audacity) to saddle the soon to be displaced employee with the task of training their replacements.
When you factor in spikes in unemployment claims, rising health care costs due to the loss of health insurance, increased mortgage defaults you are left with a crisis that may eventually dwarf the recession we are still teetering in and out of. In a sense, we are being financially victimized by the technology we created.
As with all crises or disturbing trends, there is an underlying cause that allowed or is allowing this to happen. One such cause is the sometimes unrealistic salaries that are being demanded of employers. The salary an employer will pay is predicated on the value of the position for which it is being paid. When a company in their eyes is forced to overpay for less than value added talent the wheels of the cost containment process are put in motion.
Paying very little for a lot in return is not the principle of what our economy is based on but it is the ideal scenario for many companies in today’s job/labor market. Supposedly, increased productivity with decreased payroll costs is too enticing for far too many to pass up. Sadly there is a shortage of forward thinking executives who want to be the exception to what is becoming the rule as described above.
The 2016 Presidential sweepstakes will play a large role in shaping the future. Conservative candidates are greatly disturbed by American workers being forced onto the unemployment line as their job was sent to another country. If that mindset successfully convinces voters to put them in the drivers seat of our economy we can look forward to jobs coming back into the country while managing to satisfy the cost vs. profit needs for corporate America.
I do not profess to be an economics expert nor a labor market analyst. I do however firmly believe that the role of the sales person who by virtue of what they do creates new jobs. Policies and philosophies have their part. But by and large, it is the salesperson/entrepreneur who play the key role in all of this.
As the year progresses, new classes of graduates will emerge and look to migrate into their chosen careers. Let us first congratulate them on their achievement and wish them luck. Let us hope that all of the years of study they put in and all the tuition they paid will not claim them as victims of cost containment as well.
The world looks for America to be at the forefront when it comes to technology, medicine, science and the like. If our best and brightest are not the ones leading the way America’s debt load will become so bloated it will take generations to pay it down.
How much does cost containment cost? Look into the eyes of a new born baby and apologetically whisper you are sorry for what has happened, and for any part you have contributed, but now the baton of responsibility will soon be passed onto him. That is the real cost of cost containment.
I am defined by the successes of the clients and candidates I have helped.
7yThank you Joseph!