Cutting IT Labor Costs: The Pros and Cons - 'Reducing Training (25%)'

By CIOinsight  |  Posted 09-24-2007

Cutting IT Labor Costs: The Pros and Cons

Staff expenses-salaries, benefits, bonuses, training and travel-can represent nearly one-third of IT budgets, and become prime targets for some CIOs to reign in costs. CIO Insight surveyed top IT executives to determine how they control costs,

Cutting IT Labor Costs:  The Pros and Cons

Cutting IT Labor Costs: The Pros and Cons - 'Hiring Freeze (60%)'

Pro: Compels managers to more efficiently align work force.

Con: Dumps additional work on employees who already feel overburdened.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Hiring Freeze (60%)'

Cutting IT Labor Costs: The Pros and Cons - 'Limiting Travel (56%)'

Pro: Saves precious time by using video/teleconferencing technology.

Con: Reduces face-to-face meetings that create valuable relationships.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Limiting Travel (56%)'

Cutting IT Labor Costs: The Pros and Cons - 'Layoffs (37%)'

Pro: Purges ineffective workers from payroll.

Con: Erases institutional memory and removes valuable, talented employees.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Layoffs (37%)'

Cutting IT Labor Costs: The Pros and Cons - 'Reducing Training (25%)'

Pro: Forces management to pinpoint training where it's most needed

Con: Harms worker morale and productivity, and prevents companies from gaining new competencies.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Reducing Training (25%)'

Cutting IT Labor Costs: The Pros and Cons - 'Limiting Bonuses (22%)'

Pro: Affects relatively few employees in most organizations.

Con: Eliminates a key motivator of enhanced performance.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Limiting Bonuses (22%)'

Cutting IT Labor Costs: The Pros and Cons - 'Delaying Raises (16%)'

Pro: Offers a better alternative to layoffs.

Con: Affects morale adversely across the enterprise.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Delaying Raises (16%)'

Cutting IT Labor Costs: The Pros and Cons - 'Decreasing Benefits (16%)'

Pro: Saves staffing costs without cutting pay.

Con: Seen as or more important than salary by many employees, especially health care perks.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Decreasing Benefits (16%)'

Cutting IT Labor Costs: The Pros and Cons - 'Cutting Salaries (2%)'

Pro: Brings salaries of current and future employees in line with market value.

Con: Induces key employees who feel their worth is devalued to leave.

Percent of CIO Insight respondent companies cutting staff and labor costs in 2007

Cutting IT Labor Costs:  The Pros and Cons - 'Cutting Salaries (2%)'

Cutting IT Labor Costs: The Pros and Cons - 'Methodology'

CIO Insight surveyed 256 IT executives in July as part of its Cost Management report published in its September issue. The results in this slideshow represent the nearly 25 percent of respondents who said their companies are cutting staff and labor costs

Cutting IT Labor Costs:  The Pros and Cons - 'Methodology'