Research: COVID-19 Microstudy on Cost Optimisation

The significant impact of COVID-19 on metros has greatly increased the need for cost optimisation strategies, particularly for the short term. It is expected that metros’ financial gaps are growing larger due to demand recovering more slowly than initially thought. The Cost Optimisation During COVID-19 Microstudy reviewed how metros carry out cost optimisation within their organisations because of the pandemic.

The 2021 revenue outlook is generally lower than what was assumed earlier in the pandemic, with the growing realisation that it will likely take several years for revenues to return to the pre-pandemic levels. In response, metros set up cost reduction targets and cost optimisation measures for 2021, consisting of approaches for cost reduction and for cost avoidance.

The cost optimisation measures used by metros during COVID-19 separating into corst reduction measures and cost avoidance measures

The most effective measures reported by metros relate to service reductions and control of labour costs. Managing labour costs is a common approach given that it accounts for the majority of metros’ expenditures and metros can mostly take actions relating to labour costs by themselves.

The COVID-19 situation may present opportunities for metros to directly face and handle issues related to high labour costs and low labour productivity. As a result, metros can hopefully reset strategies relating to human resources and cost management to ensure they are well positioned to succeed after the pandemic.