Streamlining Effective in Slashing HR Costs

June 19, 2002 ( - The most effective way of corralling human resources costs is to streamline HR operations, a new study found.

The HR Management and Cost Control Survey by the Institute of Management and Administration (IOMA) found that 62.8% of companies pointed to a slimmed-down HR operation as their top cost saver.

After that, 54.7% of the officials said they saved money by using the Internet as a recruiting tool, as opposed to using recruiters or newspaper advertisements.

Fat Trimming Tricks

Other cost-cutting strategies that garnered high marks were:

  • using the Internet or intranet to automate HR functions, cited by 41.9% of respondents,
  • asking staff to assume more responsibilities, mentioned by 39.2%

The former approach, which saw all time card processes, benefits information, benefits and training enrollment, 401(k) administration, employee data changes and performance evaluations move to a Web-based format, reportedly saved employers between $10,000 to $2.5 million.

Smaller size companies, those with up to 200 and 251 to 1,000 employees, relied more heavily on the use of the Internet for recruitment to cut costs. Larger companies with more than 1,000 employees, however, relied on streamlining HR processes and procedures.

Almost 50% of companies with 251 to 1,000 employees adopted or changed systems/software to manage their HR department costs.


The company officials surveyed also cited other cost-savers:

  • 57% of wholesale/retail companies mentioned cutting back on staff travel and conferences,
  • 66% of transportation employers also cited outsourcing one or several HR functions