Cut costs without cutting people: the option most businesses miss

Costs are up, margins are down, and the usual two answers are to put someone on or to let someone go. Most Australian businesses of 10 to 250 people have a third option sitting in plain sight: take the repetitive work off the people they already have. This article looks at what the numbers say about the squeeze, where the cost really sits, and how to use automation to cut it without cutting people.

The short version

The pressure is real and it is not going away this year. But a large part of what a business spends on wages goes on work that does not need the person doing it: retyping, chasing, checking and reporting. Removing that work is cheaper than hiring, kinder than redundancies, and it puts skilled people back on the work that earns money.

What the numbers say about the squeeze

Two recent Australian surveys describe the same picture from different ends of the market.

The Council of Small Business Organisations Australia (COSBOA) surveyed 841 small business owners in July 2025 for its Small Business Perspectives Report. It found:

• Costs had risen for 93% of respondents, led by wages, rent, insurance and utilities
• 64% reported lower profits than a year earlier
• 72% expected costs to rise again over the next 12 months
• 43% had significant difficulty finding suitable staff, and 71% named high wage expectations as a barrier to hiring

The Australian Industry Group's Industry Outlook for 2026, based on a survey of 225 business leaders in late 2025, found wage costs were the most commonly named negative factor, ranked first or second by half of respondents. Its input-cost expectations were the highest the survey has recorded, and leaders expected costs to rise faster than the prices they could charge.

On top of that, award and minimum wages rose 3.5% from 1 July 2025 and the superannuation guarantee moved to 12% on the same day. Every person on the payroll costs more than they did a year ago, before anyone gets a pay rise.

Where the cost actually sits

Here is the part most cost-cutting conversations skip. The COSBOA report found owners spend "around two or three hours per day on activities that do not generate revenue". Forty per cent spend more than six hours a week on financial administration alone: BAS, payroll, invoicing and chasing payments.

That pattern does not stop at the owner. Walk through a typical established business and you will find:

• An operations manager who spends part of every day re-keying job details from one system into another
• A finance person whose month end is three days of exporting, pasting and reconciling
• A sales manager who chases quotes by hand because nothing reminds them
• A team leader who checks three systems every morning to see what has changed

Each of those people was hired, and is paid, for their judgement. A good share of their week goes on steps that need no judgement at all.

To make that concrete, take an illustrative example. An operations manager on $95,000 a year, plus super and on-costs, costs the business roughly $55 an hour. If eight hours of their week go on retyping, chasing and status checks, that is about $23,000 a year of senior time spent on clerical work. Across three or four roles the number is well into six figures, and it is money the business is already spending.

The three options, side by side

When the work piles up, businesses tend to reach for one of two levers.

• Hire. Add a person to absorb the admin. In the current market that means recruiting against a shortage, at a higher wage than two years ago, with payroll tax, super at 12%, leave, equipment and management time on top. Ai Group found only 9% of businesses plan to increase employment in 2026.
• Cut. Reduce headcount and ask the remaining people to cover it. The admin does not shrink, so the skilled people who stay do more of it, and the work that earns money gets less attention.
• Remove the work. Automate the repetitive steps so they run without a person, and keep the people for the parts that need a person. This is the lever Ai Group's respondents are reaching for: 36% plan to improve operational processes to deal with cost pressure, and technology is the only area where investment is expected to rise in 2026.

The third option is not free. It costs money to set up and it needs someone in the business to own it. But a process that runs itself costs a fraction of a salary each year, does not resign, and does not need a 3.5% increase in July.

What this looks like in practice

The savings are rarely in one big process. They sit in a handful of small ones that everyone recognises.

• Enquiries and quotes. Every web enquiry logged, acknowledged and assigned within minutes. Quotes followed up automatically on day three and day seven. No one has to remember.
• Invoices and payments. Supplier invoices read and entered without retyping. Customer invoices sent the moment a job closes. Overdue reminders sent on schedule, with a person stepping in only when a customer replies.
• Onboarding. A new customer or a new staff member set up in every system from one form, with the same steps every time.
• Reporting. The Monday numbers built from the systems overnight, instead of by someone on Monday morning.
• Approvals. Purchase orders, leave requests and credit limits routed to the right person with a reminder, instead of waiting in an inbox.

None of this removes a job. It removes the part of several jobs that nobody was hired to do.

What not to automate

Cutting costs is not a reason to automate everything, and some of the worst outcomes come from trying.

• Decisions. Pricing, credit, hiring, how to handle an unhappy customer. Automation can prepare the information. A person decides.
• Anything that changes every month. Stabilise the process first, then automate it.
• Rare tasks. If it happens four times a year, the return is not there.
• Customer conversations that need a person. Automate the acknowledgement and the follow-up, not the relationship.

The research on this is clear: a well-run process handles the routine steps, and people handle the exceptions. Businesses that try to automate the judgement end up with a faster way of making mistakes.

A way to start this month

You do not need a strategy document. You need one process and two numbers.

1. Ask your team what they would hand over first. They know. Data entry, chasing and status updates usually come top.
2. Pick one process that runs every week and follows rules. Quote follow-ups, invoice entry and onboarding are the usual candidates.
3. Write down two numbers. How many times a week it runs, and how long each run takes a person. Multiply by their hourly cost. That is what the process costs today.
4. Automate it end to end, with a person checking the exceptions.
5. Measure the same two numbers a month later. That is your return, in hours and dollars, and it is the case for the next one.

Sources

• Council of Small Business Organisations Australia (2025). "Small Business Perspectives Report 2025". Survey of 841 small business owners, July 2025. Read the report (PDF, hosted by CommBank)
• Australian Industry Group (2026). "Australian Industry Outlook for 2026". Survey of 225 business leaders, October to November 2025. Read the outlook on aigroup.com.au
• Fair Work Ombudsman. "Annual Wage Review 2024-25": minimum and award wages increased by 3.5% from 1 July 2025. Read it on fairwork.gov.au
• Australian Taxation Office. Superannuation guarantee rate of 12% from 1 July 2025. Read the ATO notice on ato.gov.au