It's cost-cutting turtles all the way down. Any subcontractor without multiple clients is going to do the same kind of cost-cutting that the main company does.
Certainly there's inefficiency in any human endeavor, but just cutting staff is unlikely to solve it. At least, not if you're doing it proactively to save money. Sometimes you need redundant roles just to make sure someone is paying attention to details that might get lost.
If home based staff cost 10% less due to not having to pay building overhead, and your competition takes full advantage of that savings and you don't - that 10% cost savings might just be enough for them to win in the long haul.
Having basically no overhead for customer service, human resources, benefits etc will certainly cut costs for all parties. It's also the definition of a race to the bottom.
IT is just a reflection of overall society. In the name of immediate profit, we're cutting all we can cut, including essential services and maintenance; sooner or later we end up paying the full price for it.
This will not change until the reward systems for managerial classes change significantly.
Some solutions to this include furlough rather that straight cuts. Those do reduce some infrastructure costs. I can’t reduce service staff and contract work at all if everyone is working 40 hours a week still. We use the same toilet paper, water, electricity, other consumables and depreciating equipment. A saw blade cuts X feet of metal. But I can trim if everyone is working 37 hours.
As leadership at my institution meets to discuss long-term impacts of other people not spending money on us, the first items on the chopping blocks are the super-convenient, but not super-mission critical SaaS that can be replaced by slower, but still effective processes.
The first items. Really, the only items right now. We're 100% not looking at cutting the people working here. This is new and different. 2011 was the last reduction in our labor force, and we only considered human cuts at that time.
I've seen companies spend tens of hours of multiple employee's time to reduce a one-time cost by $1k, and then because of that reduction spend $10k elsewhere.
Actually its capture by a function that has no interest in the efficiency of how people work just in lowing the cost to them.
ie I save 5% on office costs (and get a year end bonus) but I dont care that performance went down by 15% (this is what IBM found was the benefit of having a private office)
this kind of marginal cost-cutting at the expense of medium/long-term productivity is commonplace yet baffling to me. even if it doesn't increase productivity, surely it increases retention to some degree, I just don't get why you wouldn't make a small investment here as an owner/manager.
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