I have tried several methods to control cost in my own company and have been successful to a great extent. It is all about the data you have and what can be derived out of the data meaningfully.
It is seen that in an IT company like in what I am working currently, the cost of salary would be about 55 to 65% of the monthly spend. Therefore it is easy to understand that working more with manpower cost would help. Non performing employee should not be allowed to hang on in the company for long. This will ensure that we have all productive employees and the cost is justified and the damage the underperforming employee will bring to system will also be contained.
Right project and resource management techniques would help take out approximately 20 to 25% more output without spending additional cost.
Decision on hiring a full time resource should be taken only if the job at hand justifies a full time resource and enough work for the person for sufficient time. In absence of the clarity on longevity of the job at hand, taking outsourced staff would be a better deal.
Keeping overhead support staff within control of 5 to 8% is necessary. Customer does not pay for the support staff and there is an optimal point where the support staff starts becoming painful overhead.
On closely watching some of the teams I worked with, I realized that more than 40% of the time team had been spending on reworking and searching. Setting up the right control mechanisms like standard project management practices, using standard coding techniques, reusing components and regular reviews helps move thing faster.
There is no wonder if your team ends up delivering two times the output you have budgeted for provided these improvements are not ignored.