You’re a leader in a company staring down the barrel of a bleak financial year. The numbers don’t lie, and you’ve come to the difficult conclusion that surviving means cutting 20% of your costs. So, what do you do?

The Usual Reactions (and Why They Backfire)

1. Tell as Few People as Possible The instinct to keep things quiet is understandable. You don’t want to destabilise the business or spark panic. But here’s the thing: your people already know. Rumours travel faster than the company newsletter, and the rumour mill rarely paints a rosy picture. In fact, the imagined horrors are often far worse than reality.

2. Cut Heads (All Our Costs Walk in Through the Door) The classic “human resources” approach. Costs do, indeed, walk in through the door every day, but so does expertise, morale, and institutional knowledge. Slashing jobs might provide immediate savings, but it risks long-term damage. You could find yourself with a lean team—and no idea how to operate efficiently.

3. Call in the Consultants Consultants are great at giving you a polished presentation of things you already know. They’ll interview your staff, write up a report, and charge a tidy sum for their efforts. The advice? Likely something along the lines of "cut unnecessary costs and streamline operations." Groundbreaking.

4. Above All, Don’t Speak to Your People Whatever you do, avoid talking to the very people who have the greatest vested interest in the company’s survival. Because, you know, why ask the ones who actually know how things work?

The Usual Result

Here’s what typically happens when you follow the above playbook:

• The rumour machine kicks into overdrive. Employees start whispering in corridors, speculating on layoffs and closures.
• Your best people—the ones with the most options—begin polishing their CVs. After all, why wait for the axe to fall when they can jump ship now?
• Investors catch wind that something’s amiss, and their confidence dips faster than your profit margins.

Sound familiar? It’s the corporate equivalent of shooting yourself in the foot.

A Better Approach: Ask Your People

Here’s a radical idea: instead of hiding the truth, share it. Tell your people what’s going on. Be honest about the challenges. And then—brace yourself—ask for their help.

Why? Because your employees know things you don’t. They’re the ones on the ground, dealing with the day-to-day realities of your business. They know:

• Where the waste is. (That subscription software nobody uses? The energy-hogging equipment? The overstaffed departments?)
• What’s critical and what’s merely “nice to have.”
• Which products barely break even and which projects are haemorrhaging resources.

Real-World Examples of Employee-Led Savings

1. The Manufacturing Maverick A factory floor team identified a process that was consuming twice the resources necessary due to outdated machinery and redundant steps. Their suggestion? Invest in a minor upgrade and retrain staff. The result: a 30% reduction in production costs.

2. The IT Whiz A tech-savvy junior employee flagged a pricey software licence that had been auto-renewing for years but wasn’t even being used. Cancelling it saved the company £60,000 annually.

3. The Customer Service Insider A frontline worker noticed that a “customer loyalty programme” was costing more to maintain than it brought in through repeat business. By cutting the programme, the company saved £100,000 a year with zero impact on customer satisfaction.

The Benefits of Transparency

When you bring employees into the conversation, something amazing happens: fear gives way to focus. Instead of dreading the unknown, your people start looking for solutions. Many would rather accept a temporary pay reduction than see their colleagues lose jobs. Some nearing retirement might volunteer for redundancy packages. Others might have brilliant ideas for streamlining operations or cutting waste.

And don’t underestimate the morale boost that comes from being trusted. Transparency builds loyalty. People are far more likely to go the extra mile for a leader who treats them with respect and honesty.

How to Do It Right

1. Communicate Early and Clearly Don’t wait until the rumour mill is in full swing. Be upfront about the challenges and the stakes. Use plain language—no jargon or corporate-speak.

2. Create Forums for Input Set up meetings, suggestion boxes (virtual or physical), or even an anonymous survey to gather ideas from across the organisation.

3. Act on Good Ideas When employees make suggestions that save money or improve efficiency, implement them. And don’t forget to give credit where it’s due.

4. Follow Up Keep everyone updated on progress. Celebrate milestones and savings achieved. This reinforces the sense that “we’re all in this together.”

Closing Thoughts

Cutting 20% of costs isn’t easy, but it’s far from impossible. The key is to resist the temptation to hunker down in the executive suite and make decisions in isolation. Instead, trust your people. They’re your greatest resource—and they’re more invested in your company’s survival than anyone else.

So, ditch the consultants and the secrecy. Have a chat with the folks who keep your business running. You might just find that saving 20% isn’t as scary as it seems.