Managing Partner of Trust Consult, Charles Mensah, says businesses should be engaged in cost reduction against cost cutting.

According to him, cost reduction is finding innovative solutions to doing business during the current economic downturn.

“So you’re going to look at the innovative way of delivering certain service that you’re providing, innovative ways of doing things. So this is time for us to start thinking the best way without affecting the quality of the things. Because it’s a phase we’ll pass, but if you rush and cut cost , by the time the phase is gone, it’ll be difficult for you to come back,” he said on JoyNews’ PM Express Business Edition.

He added that “I think most companies have started negotiating with their employees to have a freeze on salary increase, and then also accruing the expenses and telling them that we don’t have cash but we recognize the expenditure so when the cash flow improves they’ll pay.

“I know some companies that have taken some restrictive measures where they’re paying only 50% of their salary now, and they’re accruing the next 50 for future when things improve.”

He thus cautioned employers to hasten slowly in taking certain decisions that may poorly affect their businesses when the economic downturn finally passes.

“Because as we speak right now, if you rush to cut cost and things improve it will be difficult for you to turn on the machine. Because once the machine is in motion you don’t rush to take certain decisions. It’s a reasonable period for you to have a discussion with your employees, for you to have a discussion with suppliers and then your customers. So there’s a bit of negotiation as we speak,” he said.