QuestionGuy
What did your company do to “save money” but ended up costing the company lots of money instead?
What did your company do to “save money” but ended up costing the company lots of money instead?
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We used to get a travel per diem for our meals. Most people would eat cheap like get a free breakfast at the hotel and get a $5 footlong and split it for lunch and dinner and bank the rest. I traveled a lot so it was like a nice perk. The company got wind of this and changed their policy to we had to buy and expense all our meals. The problem was they had to have the same policy for all employees so they couldn’t put a cap on meals due to the sales guys having to take out clients and stuff. We took full advantage of it and ate like kings. My meals expenses were twice what they were paying in per diem.
Deduct the salary of someone who forgot to do something. The person came in hard with a lawyer and took them to court, made their case that the company is the one who failed to create proper procedures and checks and balances for a complicated process, and beat the company in court and the employee was awarded damages that were way more than the initial lost amount.
It was pretty obvious to anyone the company was at fault. I had actually left before the matter got resolved, and one factor was I figured they would get creamed in court and end up looking to do some layoffs after.
Outsourcing the call center to central America. We were one of the only companies in our line of work that ONLY operated in the US, and customers loved us for it. Their customer base cut down by 1/3 within 2 years of outsourcing, and now they are hanging on by a thread. Wouldn’t be surprised if they went under within the next 5 years.
Not my company but I remember when the city of Baltimore was hit with a ransomware attack and the attackers were asking for $76k. They refused and ended up paying $18 million in recovery. I guess they figured they’d spend less than $76k to recover from the attack.
Hiring an optimization consultant.
Five years later, the partners had to sell the company.
IT here and I could literally spend days reviewing clients who were penny-wise and dollar-foolish.
Skimped on sales support because my location had historically done poorly.
I walked into a home improvement position (I am experienced) and sold an exceptional amount in comparison to what had been moved in their corporate location previously.
I was supposed to have a coordinator, the previous salesman had 2… the lady they gave me had history of abusing FMLA — whenever it got busy she would go home which left me holding the bag to so her job too…. but the sales from the guy before me only warranted one half time coordinator… so they just let it ride to save on labor costs.
So I put in notice and left pronto. Last I checked 70% of the 400k in sales I has put in for them were angry or planning to cancel. It was a stupid waste of energy and resources for sure.
They had saved about $1,600 in labor costs by sticking me with her… and ended up losing somewhere between $70k and $100k in pure profit.
Thinner “recycled” plastic bags. We just have to use two now.
The roof of our building was leaking bad. Got quotes for doing just a third of the roof and for doing a whole new roof. They choose to do third of the roof. All it did was move the leak. A month later they did the whole roof. They would have paid a lot less had they done it right the first time.
The company I work for once put a giant inflatable gorilla out front to entice people to come work for us… We make transmission seals for vehicles. My place of employment literally has nothing to do with gorillas.
A voluntary severance program which eventually ended up with the company having more people than before.
The scheme was meant to get rid of a few obscenely paid upper management types but it was rolled out company-wide. They severely underestimated the number of people who would apply.
Stopped giving lower level staff pay rises.
All of the staff were very specifically trained on our product. Years of tenure and experience behind them to help customers with.
Most of the tenured staff left, and they now have a constantly revolving door of staff, which they pay a fortune to train, only to see them leave 6 months later.
I worked a side job delivering for a furniture store. The delivery truck was old an falling apart and poorly maintained. It broke down all the time and was probably more expensive to keep fixing than to buy or lease a new truck.
Also, the owner was really stingy about tools. He didn’t want any tools left in the truck in case they got stolen, even though the truck could be locked. So half the time we would forget tools and have to borrow a customers screwdriver or drill which made us look super unprofessional. Also the screwdrivers and drill bits he did have were stripped and the batteries for the drills hardly held a charge. You might wonder why we didn’t just bring the tools every time we went out? Because half the deliveries didn’t require them, so we never developed the habit.
I ended up buying two screwdrivers and keeping them in the cab of the truck. It helped multiple times to have those. But it was like come on, who cares if $100 of tools get stolen? The owner probably lost more than that much business just having us look so unprofessional.
Micromanaging.
I’m good at my job. My role is one that was specifically made for high performers. But on Friday I got a message from my boss’s boss that I spent too much time away from my desk. I go into the office every day but I have the option to work from home. I work hard but I have the option to slack off. Now that I know if I go to the office they’re just watching over my shoulder then guess what. I’m not going. And I’m doing exactly the bare minimum necessary. And I know many others who have adopted the same attitude. So instead of letting us high performers perform well you now have the high performers doing the absolute bare minimum. Good luck.
Not where I work, but my bf’s healthinsurance changed his medication brand to save 11 euro’s in 3 months. The new brand isn’t working properly wich requires him to take more of his other medication, wich costs a few thousands extra.