The recovery may be underway, but that does not mean that companies that instituted cost-cutting measures over the last 2 years are ready to look the other way and just let their expenditures return to pre-recession levels.  They have their work cut out for them, according to McKinsey's Ankur Agrawal, Olivia Nottebohm and Andy West, who argue in the McKinsey Quarterly that most cost-cutting measures have limited lasting power.  They write:

Many executives expect some proportion of the costs cut during the recent recession to return within 12 to 18 months —and prior research found that only 10 percent of cost reduction programs show sustained results three years later.

On either schedule, any programs initiated in the early months of the downturn are already beginning to fail—just as savings would be most useful to finance growth. Sales, general, and administrative (SG&A) costs prove to be particularly intransigent. While manufacturing efficiencies have enabled an average S&P 500 company to reduce the cost of goods sold (COGS) by about 250 basis points over the past decade, SG&A costs have remained at about the same level (Exhibit 1--below).

So to fight the erosion of cost-cutting gains, the authors argue that leading executives need to be involved, but since the most effective cost cutting measures take place at "very small, very practical" levels, companies need to utilize clear benchmarks.  And most important, efforts to reduce costs must be tied to larger strategic initiatives.  Read Five ways CFOs can make cost cuts stick here.