It’s easy to track expenses that are obvious expenditures. Salary costs, program licensing fees, the manufacturing cost of your new product, or the training cost of upskilling a manager.
It’s harder to track things like how much it costs you to run an all-hands meeting every week, or how much it costs to replace an employee who is unengaged and unhappy with their job.
Yet the interesting thing is that oftentimes the harder-to-track costs are usually preventable expenses. And often, the hard-to-track costs are more expensive than the clear-cut expenditures.
I’m not telling you to be reckless with your budget, or to cater to every employee’s whim, but you should do the math and make sure for yourself that cutting costs and short-changing your staff is actually saving you money and not costing more of it behind the scenes.
Focus on measuring the invisible costs and I think you’ll be surprised how much more profitable you’ll become in the long run.