22 Ways to Cut Costs in Time of Sequester

Recently, I’ve talked to a number of government employees whose agencies are in full cost cutting modes as related to sequestration. All of them said they are looking for ways to cut costs.

So I thought I’d write a list – so here you go:
22 Ways to Cut Costs in Time of Sequester:

1) Cut transit subsidies – Yes we all love our transit subsidies but they cost a lot of money. Would you be willing to have a lower transit subsidy or have 6 months of no subsidies to save some furlough days?

2) Cost-effective training options – look to online training, peer-to-peer training, low-cost in-person alternatives (lots of Federal Executive Board’s have cheap courses)

3) Focus on cutting processes – Are there additional steps costing staff or contract labor that are unnecessary processes in 2013? Do we really need to spend 6 months & hundreds of thousands of dollars on an ATO before putting a new system live? Does the process really need 5 levels of review? Now is the time to streamline the processes – we literally can’t afford the extra steps anymore

4) Printing – Encourage double-sided printing. Run a campaign tracking printing usage and set a goal to lower it – encourage use of tablets to read instead

5) Cutting subscriptions – Does your agency need all the subscriptions it currently has? Is there a way to optimize licenses?

6) Virtual meetings instead of travel – Yes, it’s helpful to get everyone in the same room. But budget cuts often mean less travel. Look at ways of running virtual meetings and conferences instead. Note – this is a skill and spend time on getting right equipment in place and set-up (lightning, prep, etc)

7) Cut on office space – GSA is radically reducing their HQ footprint in DC as they are moving to increased telework and hoteling. Can your agency cut on office space?

8) Rent out extra office space – See #7 above. Maybe you have cut down on office space but you have a long lease. Try to rent out your extra office space – you could rent it out for events, for contractors working on agency projects that need space, for local startups and companies

9) Bring Your Own Device – Most white-collar professionals already have a smartphone and don’t need their agencies to buy and maintain a separate cellphone for them. Implement a BYOD program to save on phone costs (provide a subsidy for minutes and technology to separate public/private)

10) Desk phones and voicemails – At home, many people are getting rid of their landlines. Do you still need your desk phone and your voicemail? I know a local university who decided they didn’t need to pay $5/month per voicemail anymore as wasn’t relevant in 2013

11) Save on Off-sites – Have off-site meetings at your own agency. Or swap with another agency as a barter on space. Also look at local libraries or universities for cheap or free space

12) Offer early buyouts – The hard part of cuts is usually most of an agency’s expenses is in full-time staff. One way to cut costs is to offer buyouts to encourage retirement of high-cost salaries. Win/win for all – helps folks who may want to retire early and allows you to cut on costs

13) Look at no-cost self-funding models – I’m a particular fan of self-funding model. Here’s a clear example- the company NIC provides state gov’t websites for free and gets paid as fee on transactions (paid for by end users) – literally overnight the State no longer needs a million-dollar website budget.

14) Kill Print Newsletters & Reports – Are you still sending a print newsletter to your constituents or employees? Are you mailing paper property tax statements? Now’s the time to eliminate that postage and printing costs as most individuals would rather have it in electronic format anyways

15) Look at shared-in-savings contract approaches – Another version of #13 is shared-in-savings contracts. Here’s an example. X agency could spend $3 millions on new energy-savings light bulbs, heating systems, etc to save money down the line. Instead (since on sequester), don’t spend any money up front – put a shared-in-savings contract – a company would install the equipment for no-cost upfront in exchange for say 5% of energy savings costs for 3 years. Same results, no cost on your budget

16) Offer a sabbatical – In academia they offer staff a year off at half-pay every 6 years. What if agencies that needed to save short-term costs either offered employees a chance to take a year off (at half pay or no pay)? Some employees might take the opportunity to pursue a dream or volunteer project or travel. It would re-energize folks and save agencies money in short-term

17) Fire Poor Performers – It is often said that government doesn’t fire poor performers. When you dive in, actually you can do it but it’s not in the culture and most managers aren’t willing to do the effort to properly offer feedback, counsel, and performance plans. Personally, in times of a budget crisis, I’d rather fire poor performers and help out the stars. Say in a 100 person office, there is 1 person that should be fired. If you fire that person, that’s 200 work days a year that don’t need to be furloughed – each 99 good performers save 2 furlough days

18) Look at Past Ideas ContestsThe SAVE Awards every year has a contest of ways to save government money – there are literrally tens of thousands of ideas to be implemented. Start there

19) Review Your Usage – If you were at home and broke, you would rummage through your house and find items that you didn’t need and host a garage sale. Review your usage of your software and equipment – are you using what you pay for? For example, at home, I realized I rarely use HBO and it’s costing me $20/month – so I cancelled it

20) Clearly Communicate – In times of budget cuts, the worst is not knowing how bad things are and going to be. Make sure to clearly communicate to all levels how much needs to be saved and by when.

21) Involve Your Staff – Put a clear goal on how much you need to save and involve your staff. Make it like CFC campaign goal that everyone knows the target and can jump on in.

22) Ruthlessly Prioritize – When I worked in a CIO shop, we had roughly 100 IT projects going on at a time. Budget cuts are the time to ruthlessly prioritize – are there 5 projects that just seem to never be complete and missing deadlines? Kill ’em. Are there 5 projects that are nice to have but aren’t delivering mission value? Kill ’em

Budget cuts are always tough but it can be used as an opportunity for change. Use it as a change to improve unnecessary processes, change to more cost-effective technology approaches, and reframe how problems are solved. It gives you the energy to cut the underperforming parts of the organization and invest in newer approaches and ideas based on 2013 (rather than 20-year old approaches).

What’s your tip? How would you cut costs in time of sequester?

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Ramona Winkelbauer

Instead of “1) Cut transit subsidies” can we please cut Executive cars? I.e., cars that are used for the convenience of the Agency directors…….

Ramona Winkelbauer

As someone who really RESENTS the MANDATORY move from paper savings bonds to electronic, I feel this suggestion too is less than helpful: “14) Kill Print Newsletters & Reports” — INSTEAD, evaluate print newsletters and reports — find out what your users want and provide it to them in THEIR desired format, not just what’s your latest format du jour.

Terrence (Terry) Hill

Good list – We just increased transit subsidies from $125 to $245 per month, but I would also eliminate free parking (mostly for execs), stop taking taxis (if buses are good enough for the Pope..), eliminate personal office space (again – execs), eliminate “shadow” and administrative staff, require everyone to get fit (see healthcare costs), consolidate “overhead” function (e.g., IT, HR, Contracting, Legal, etc). I could go on, but you get the idea.