Reduce Costs—Not Headcount: A Maintenance Playbook

Tight markets don’t have to mean layoffs. This protocol shows how to reduce maintenance costs without cutting people—by optimizing PMs, standardizing planning/kitting, cleaning data, and renegotiating spend so you protect capability for the recovery.

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The Reality: pressure on budgets, people, and performance

The pandemic reshaped family dynamics, work pressures, and health concerns—and facilities felt it too. Maintenance and engineering teams faced fast shifts in HVAC efficiency demands and sanitation protocols to protect technicians and returning occupants. At the same time, many sectors saw revenue shocks while others (healthcare, e-commerce, essential retail) surged, creating uneven labor and supply constraints. In short: volatility at the top line, volatility on the shop floor.

A quick cautionary tale: in hot markets, some contractors can name their price and schedule. That’s why internal capability matters—especially when the wider market is tight or expensive.

• U.S. bankruptcies are on track to hit a 10-year high as the pandemic recession continues to slam businesses
• By early August, 424 companies have gone bankrupt, surpassing the number of filings during any period since 2010
• Consumer-focused companies such as retail have been hit particularly hard; 100 companies in the sector have filed for bankruptcy this year

• Pharmaceutical and healthcare industry is growing and will benefit from increasing investments related to the development of a COVID-19 vaccine
• Consumer goods, particularly grocery store chains with consumers in panic-buying mode, are growing. Despite broader trends of economic decline and global recession, certain consumer goods businesses are enjoying a greater share of the market.
• Home entertainment, social media, and e-commerce sectors are seeing a surge in services. Some companies are seeing a 15-50 percent increase in their revenues. The price of Amazon stock has increased 55 percent since March 1.

Contractors are among those benefiting as demand grows for their services. Earlier this year, my wife and I were interested in finding a contractor for several home improvements. I contacted seven contractors. Four never responded, and one responded that it would be back in touch within 8-10 weeks. I received proposals from the other two contractors. One proposed charging significantly more than the other for the same work and design.

When I asked the high bidder about the quote discrepancy, I was told the market is such that the company can essentially charge what it wants, and the customer can take it or leave it. We went with the other contractor, and the earliest the work can be scheduled is early February 2021.

Don’t cut capability—cut waste

When revenues dip, defaulting to budget and staff cuts can create a long, expensive recovery. We’ve seen it before (e.g., prior energy downturns): early retirements and layoffs led to skills gaps when demand returned.

The better move: fix internal inefficiencies first.

Many organizations are confronting unprecedented issues related to their bottom lines due to the impact of COVID-19. Companies across all sectors face a severe cash crunch concerning running their daily operations due to the global pandemic.

Reacting to the drop in revenues, many organizations out of necessity began trying to reduce overall costs. They looked at expenses to determine where reductions could be made without impacting the business too much.

The next option was salary reductions and, in many cases, a reduction in headcount. The resulting rise in unemployment has led to a massive reduction in demand for many non-essential necessities. Offices and facilities are being affected, especially in commercial and private businesses. 

Some years ago, the oil and gas industry had a substantial downturn. Companies responded by offering early retirement packages and layoffs to reduce headcount. But when the market rebounded, they found themselves with a resource and skills deficit. As a result, they had to scramble to find qualified skilled labor to fill the void. I’m afraid history will repeat itself in many maintenance and engineering departments when the COVID-19 pandemic subsides. 

In an article from June 2020, I wrote “As if outsourcing wasn’t tough enough, the COVID-19 pandemic has further complicated the decisions maintenance and engineering managers must make.” The article advised managers that significant skills gaps could be looming. Well, things have gotten even more complex.

And the skills gap will only exacerbate an already huge problem for many facilities, especially those that rely on taxpayer dollars – deferred maintenance. Employing this strategy to reduce costs, meet budget funding levels, or reallocate budget funds is a recipe for disaster.

The failure to perform needed repairs can lead to asset deterioration and ultimately asset impairment. Generally, a policy of continued deferred maintenance results in higher costs, higher failure rates, and in some cases, health and safety problems.

Looking Inside for Efficiency

My first and most important recommendation for managers looking to find greater efficiency and avoid coronavirus-driven budget and staff cuts is to look internally for improvement opportunities. I worked with a commercial and private building sector client during the 2007 housing crisis that was spending funds on internal issues that needed to be addressed and improved.

As one senior member told me, “It’s easy to hide the rocks in the stream in the spring, but in the late summer, they sure do rear their ugly heads.” He meant that when life is good, you can hide a lot of systemic issues, but when things slow down, that’s when they come up and bite you.

The company had a strategic mandate related to maintenance and engineering from the CEO to clean house, which included several activities:

• CMMS data hygiene: cleanse and standardize records so planning and reporting are credible.

• Accurate asset hierarchy: speed up findability, cost rollups, and reliability analysis.

• PMO workshops: trim non-value PMs and add condition-based checks where they matter.

• Cross-training: protect coverage and flexibility without adding headcount.

• Work management re-design: identify → plan → schedule → execute → close → analyze—make it a routine, not a slogan.

• Materials readiness: understand BOM needs, stage kits, and align purchasing to the plan.

• Vendor terms: consolidate SKUs, extend lead times (fewer expedites), renegotiate SLAs and pricing tiers.

Outcome from a past client: instead of furloughs, they reassigned people to improvement work. When the market came back, they were stronger—no scramble to rehire, no lost know-how.

Meet demand with smaller budgets: focus on utilization

Technician utilization (the overlooked lever)

What other measures can managers implement to meet the many department demands while dealing with tighter budgets? There are several ways to manage expectations without a loss of headcount – and one caveat.

Average direct wrench time is often 17–24%. At 25% utilization, you need four FTEs to deliver a single FTE’s worth of direct time. World-class is ~65%. Closing even part of that gap is like adding staff—without adding staff.

Why utilization lags: not laziness—process. Time is lost to hunting parts, walking the site, unclear priorities, and planning on the fly.

How to raise it fast:

• Planning & kitting: create standard job plans (scope, tools, parts, safety, estimates) and stage kits before the weekly freeze.

• Scheduling cadence: run a weekly plan–schedule–execute–close drumbeat with a schedule freeze; measure adherence and break-ins.

• Priorities that mean something: publish a priority/SLA matrix; stop marking everything as urgent.

• Closeout discipline: require time, parts, failure, cause; audit completeness weekly for credible MTBF/MTTR and warranty claims.

Value-stream mapping: picture the waste, then remove it

Run a brown-paper/white-paper mapping exercise. Visualize how work actually flows across maintenance, stores, and purchasing. Find the queues, rework loops, and handoffs. Then redesign around:

• Readiness gates (scope locked, parts kitted, permits ready)

• Simple status codes that drive actions

• Short feedback loops (daily/weekly variance reviews)

Smart outsourcing (when it helps)

Outsource to specialists for highly skilled or spiky workloads, or to stabilize service levels while you rebuild internal routines. Keep strategy, planning, and governance close so you don’t outsource your core competence.

Deferred maintenance isn’t a savings strategy

Deferrals may balance a quarter, but they compound risk and cost—higher failure rates, asset deterioration, safety exposure, and bigger future bills. Use criticality + consequence to decide what (if anything) can be safely paused—and what must be protected.

Common pitfalls (and how to avoid them)

• Headcount before waste: fix PMs, planning, inventory, vendors first.

• Everything urgent: enforce the priority/SLA matrix; audit exceptions.

• Dirty data: make closeout fields mandatory; inspect what you expect weekly.

• One-and-done: set governance (owners, audits) and refresh quarterly.

FAQ

How do we reduce cost without layoffs?
Eliminate waste—non‑value PMs, poor planning, inventory bloat, and unfavorable vendor terms—before touching headcount.

What should we defer safely?
Use criticality + consequence to pause low‑risk work; never defer safety/environment critical tasks.

Where do savings show up first?
Fewer expedites, lower overtime, better schedule adherence, and reduced PM labor hours—followed by lower rework and material holdings.

Who owns the protocol?
Maintenance, reliability, and supply chain together—sponsored by operations leadership; planners/supervisors run the weekly cadence.