Test Cookie policy: All websites across the EU are now required to ask your permission to place cookies on your machine, and you can refuse to give it.

We have limited Spanish content available. View Spanish content.

Snap Chart

Fast and Easy G&A Cuts Won’t Cut It in the Next Recession

Companies need to raise their G&A cost efficiency.

  • junio 14, 2019

Snap Chart

Fast and Easy G&A Cuts Won’t Cut It in the Next Recession

In past recessions, many companies turned to general and administrative (G&A) functions for fast, easy cuts. However, our analysis found that the track record of most companies in managing G&A spending over the entire economic cycle—2003 through 2017—has been mediocre at best. While half of companies in a given year improved their G&A efficiency (G&A as a percentage of revenue) from the prior year, the gains were transitory: Only 6% of companies achieved efficiency gains for four straight years during the period. Come the next downturn, leaders that make the hard investments early—eliminating low-value work, reinventing processes and making the most of digital technology—will fare better than others. They’ll provide fuel for reinvestment to go on offense and emerge from the recession in a winning position.

Michael Heric and Pam Yee are partners with Bain & Company’s Performance Improvement practice.

Brief

Think Cutting G&A Costs in the Next Recession Will Be Easy? Think Again

Cost efficiency has stalled, despite massive investment in digital technologies.

Tags

Want to continue the conversation

We help global leaders with their organization's most critical issues and opportunities. Together, we create enduring change and results