Explanation:

Similar to most management theories we have wrongfully applied, most companies misinterpret and misuse this strategy and apply it in a wrong manner.  Most of the time for most companies cost leadership in HRM is all about offering lower salaries at the recruitment, letting employees resign intending to hire new employees for a lower cost, not delivering needed trainings and not following a good increment / promotional strategy.

Some companies don't use a salary structure to decide salaries. The decisions are mostly effected by subjectivity. Due to the cost of salary surveys, they never see where they are in the market.  Some companies offer lower salaries to maintain their profit margins, but there is no consistency between the salaries of top management and the rest of the employees. When deciding the top salaries, the cost consideration is minimum, while deciding the other salaries, cost becomes the most important point. 

That is why defining of the HRM policy of the company is critical for a sustainable work force management. Without just applying the cost reduction methods, application of cost management strategies are most important since the long term employment is based on the sustainable employee retention.  We have to manage cost, not letting the cost to manage us. When that happens, our employer branding gets affected and we become unpopular in the job market.