What are the hidden costs of NOT updating and replacing equipment?
To help you recognize hidden costs in not replacing or updating work equipment, we asked finance professionals and CEOs this question for their best insights. From increased downtime to employee frustration and discontent, there are several insights about the costs you may incur if you neglect the equipment necessary for running your business.
Here are seven hidden costs of neglecting your equipment:
- Increased Downtime
- Compromised Safety
- Low Brand Reputation
- Diminished Product Quality
- Higher Replacement Costs
- Security Breach
- Employee Frustration and Discontent
It’s no surprise that old equipment will be a lot more prone to falling apart and will need a lot more maintenance than simply replacing it for an improved version. And the time and resources taken to consistently keep repairing older equipment can cause a huge dent in the workings of an organization and, thereby, its profitability too. In some cases, these systems may even become obsolete, putting your business at a loss while you wait for a replacement to take its place.
Riley Beam, Douglas R. Beam, P.A.
Depending on your industry and the kind of equipment you’re dealing with, you could potentially be putting the lives of your workforce at risk by not investing in a timely replacement. From parts failing at the worst possible time, electrical mishaps, and serious accidents and injuries, defective equipment can be detrimental to the safety of your workplace which is why it’s important for organizations to inspect and replace faulty equipment at the earliest.
Demi Yilmaz, Colonist.io
Low Brand Reputation
Let’s be honest – if you’re providing your employees with old devices or not updating your equipment, you are hurting your employer branding. Specialists looking for jobs research the Internet very carefully. Every weakness of your company lowers your competitiveness and attractiveness in the eyes of potential employees.
Natalia Brzezinska, PhotoAiD
Diminished Product Quality
Not updating and replacing your equipment will result in a depreciation of your product quality. In any industry that sells a product, there comes a time when the equipment breaks or becomes outdated, and it’s best for your business not to cut corners. Product quality will decrease and your customers will absolutely notice the difference. Being a decent and honest supplier by updating and replacing your equipment when necessary will ensure customer loyalty and increased sales.
Eric Elggren, Andar
Higher Replacement Costs
Anyone who’s ever worked with professional equipment knows that you have to treat it right, because otherwise, you’re just throwing money away. Repairing or outright replacing a broken piece of equipment is much more expensive than maintaining it. Not wanting to update or replace is also going to go badly, because equipment that is worn out or outdated is dangerous, and you do not want to be paying the medical and potentially legal bills that come out of that situation. Plus, the work doesn’t come out as good and you have to go back to fix it for free again and again. It ends up costing more in free labor than it would have to just get new equipment and do the job right the first time.
Rick Berres, Honey-Doers
Regularly updating and replacing equipment is a crucial part of running a business. Old or outdated tech can cause various predicaments, some more serious than others. One of the worst-case scenarios is a security breach that can generate financial loss and intellectual property damage as well as more hidden costs, including remediation, reputational harm, or even national security (depending on the organization in which the data breach occurred).
Agata Szczepanek, MyPerfectResume
Employee Frustration and Discontent
When you are slow to replace equipment that is no longer serving the business’s needs, it slows down productivity and frustrates your team who relies on great infrastructural support and business tools for them to carry out their job functions. It also decreases work morale as management sends a negative psychological message to their employees. When management fails to provide great infrastructural support and effective tools, you are showing disrespect to your team who must work twice as hard to get the work done.
Struan Baird, Luxury Scotland Tours