Workforce Planning

5 Reasons Small Business Let Their Support Areas Slide

Sally Balwin

Sally Balwin
Recruitment | HR | Business Development

I spend most of my time working with and talking with small business owners … after all, it is my passion.  One thing that never ceases to amaze me is the lack of time and money small business owners invest in their support areas.

What do I mean by “support areas” – things like financial management, IT management, planning and forecasting and human resource management.  These are all critical parts of every business however are mostly ignored until crisis requires engagement.

As a small business owner, how many of the following can you say yes to:

  • I tend to ignore unsatisfactory performance of staff until it is at a point where it can’t be ignored anymore.
  • I generally recruit staff when I really really really need them for a particular job and not before.
  • I generally make staffing choices in rushed and stressed situations.
  • I generally engage IT, Accounting and other support services providers based on price.
  • I rarely take time to plan and undertake forward thinking in relation to my business and its support services.
  • I don’t have a business plan.
  • I don’t have a cashflow or budget.
  • I don’t have an IT plan.
  • I really only know the bare minimum in relation to laws around staff.
  • I avoid having to use an accountant or solicitor unless I absolutely have to.
  • I have experienced significant interruption to my business due to something going wrong in relation to one of my support areas (eg, issues with Tax & BAS, major cashflow issues, major staff issue, major IT issue, major legal issue).

I am hoping as a business owner you don’t have any ticks above.  However, in reality I know most will.

So, at the recent meeting of the Albany Creek Business Contacts (ACBC), which is a networking group of local small businesses who get together to support and help each other through referrals, I asked the question – “why do small business owners neglect their support services”.  The answers fell into five responses:

  1. Poor time Management – too much time working on the tools that there isn’t time to work on the business.
  2. Focus is on Money making activities – the inference here was that the support services do not “make money” from a billable perspective and therefore were not the focus.
  3. Lack of knowledge – many small business owners are very good in relation to the product or service of the business however do not invest in learning how to run a business and the value add the support services provide.
  4. Previous bad experiences – it was suggested here that some small business owners have had previous bad experiences with providers of support services so once burned then never to return.
  5. Ain’t broke don’t do anything with it – the suggestion that if it isn’t broken or creating problems then nothing needs to be done.

The problem with this situation is that when issues do arise in the business it winds up costing many many times more in time, dollars and productivity to deal with the issue and/or fix it than if some investment had been made along the way.

For example:

  • rule of thumb it costs businesses 2 ½ times the salary of a position to replace the staff member;
  • industry research suggests a business should be investing 2-3% of its net profit on its IT; and
  • costs associated with needing to engage an accountant or solicitor to address specialist issues can be ten times plus the cost than had advice and assistance been obtained from the beginning and along the way.

If you want to discuss how to get started in building support for your business without breaking the bank, call me today (3264 4783) – I can help!

How to Retain Staff

Sally Balwin

Sally Balwin
Recruitment | HR | Business Development

The cost to your business to replace staff is around 2½ times their salary.  By example, if you need to replace an administration officer on $40k per year salary, the cost to you could be around $100K.

That’s ridiculous I hear you say  …  well consider the following which contribute to the costs:

  • direct costs to recruit (eg, recruitment agency fees, advertising fees etc)
  • salary costs to undertake the recruitment process (ie, salary of the person/people who will take calls from potential applicants, read applications and shortlist, undertake interviews and referee checks etc).
  • productivity cost having staff focused on the recruitment activities rather than regular duties.
  • productivity cost of other staff who have to pick up the work of the vacant position whilst recruitment process is being undertaken (this could include overtime costs as well).
  • costs associated with inducting/training the new staff member in their job and associated processes.
  • IT costs of setting the new staff member up in the system etc.
  • productivity cost whilst the new staff member is coming up to speed on their job until they are at peak productivity (research suggests this could be anywhere between 4-12 months).

When you look at the costs in this light, I suggest it highlights the need to look at ways to foster an environment where employees want to stay.

Employee retention refers to the ability of an organization to retain its employees.  Employee retention is a business management term referring to efforts by employers to retain current employees in their workforce.

Retention does not mean keeping an employee by obliging them to stay so it should not be costly for the company. Retention means encouraging the employee’s free choice to maintain his/her relationship with the company.  Conversely, retention is not about keeping everyone all the time at any cost. This would require too much money and energy.  Certain criteria must be introduced, such as measuring competency, performance and engagement in order to know which employees to keep.  Your methods must depend on the level of the commitment of the employee.
The most commonly used method of retaining employees is without doubt remuneration, with different systems of financial or non-financial bonuses that become part of a “global remuneration package”.  The list is long but it includes bonuses, super and non-super benefits, and stock options.  Policies that are solely based on the accumulation of financial bonuses don’t differentiate between employees.

Businesses can also utilise reward and recognition systems to re-enforce value of employees.  For these systems to be effective, they must be transparent, equitable and fair otherwise you can experience the opposite effect resulting in disgruntled employees and a toxic culture.

The following Retention Questionnaire published (2006) is a great start to understanding where you, as a business owner, are at in your approach to staff retention.  Take some time to answer the following questionnaire in order to get an indicative feel for the capacity of your business to keep its employees engaged. The following questions are simply an indicator of commitment to retention.

  • My company is well regarded by people looking for work and employees say flattering things about their job.
  • I have an employee-centric culture that values internal customers as much as external ones.
  • My employees have ample opportunity to understand how their work contributes to the bottom line of the company.
  • I provide my employees with opportunities for growth and development.
  • I provide a comfortable, safe work environment and I have a good reputation in the community.
  • My leadership is accessible and provides vision and direction.
  • I care for the wellbeing of my people by making employees’ lives easier and less stressed.
  • I know how much it costs me to replace every employee who resigns/needs to be replaced.
  • I know the reasons for these departures and the difference between an avoidable and an unavoidable departure.
  • I know why employees stay or leave my company and what keeps them engaged.
  • The rate of turnover in my company is lower than the average in the industry.
  • I spend more time and money on my retention program than on recruitment.
  • Salaries and bonuses are linked to performance or the development of competences.
  • Our managers are trained to select, identify, guide, coach, reward and retain their people.
  • I know my job forecast and professional development plan for the next two years.
  • My employees are aware that they are an ‘asset’ in which one needs to invest and not a ‘cost’ to reduce.
  • I use a job satisfaction or engagement survey in order to understand the requirements of my employees.
  • I know who the talented employees in my company are.
  • I think that my company does what is needed in order to retain its valuable employees.
  • I regularly measure the effect of my retention strategy.

How many did you tick?

Under 5: You are regularly in the job market and finding it increasingly difficult to attract staff. Either you are challenging established thinking that a salary and a job are enough to motivate your employees or perhaps you have turnover rate of zero, so retention is not a priority for your company?

But let’s take a moment to think about the following: For your birthday, which present from your partner or spouse would give you the most pleasure? A cheque or a gift appropriate to your hobbies? The cheque would be easy and practical, but is not what one would expect to receive from a close family member. In this case, why do you as a company systematically use this method? It is time to research the individual satisfaction and personalised retention?

Between 5 and 10: The retention practices of your company are largely inspired by the concept of ‘the carrot and the stick’ and are centered on financial reward and Friday drinks. But you recognise that this mass motivation, used to obtain better productivity has reached its limits. Retention is not about “one size fits all”.

Between 10 and 15: You are conscious that your employees are as important as your clients and that you need to concentrate on the former to assure satisfaction of the latter. You know what is at stake with retention and you are committed to answer your employees’ demands in a culture of engagement. Excellence is on its way!

Between 15 and 20: You are an employer of choice and everybody should know it.

If you are finding your staff turnover is too high and would like some help to improve the situation, call me today (3264 4783)  …  I can help!

Performance Management is Not a Dirty Word

Sally Balwin

Sally Balwin
Recruitment | HR | Business Development

“Never confuse accomplishment with activity.” (Renowned basketball coach John Wooden (UCLA))

Performance Management  …  Managing Performance  …  Reviewing Performance  …  (you get the picture)  …  the mere utterance of these words in some organizations sends the culture and performance plummeting.

Why is this process so revered and, for some, down-right hated?

… I am too busy performing for this talk fest.

… no one takes it seriously – it’s just a compliance thing that wastes my time.

… it’s an opportunity for my manager to tell me all the things I’ve done wrong in the past year.

… it’s not worth the time or paper it’s written on – nothing happens afterwards – there’s no follow through.

… I can’t see any consistency in performance reviews.

… doesn’t matter how you perform – if you are liked you get the benefits.

… and so on  ….

Performance Management is a tremendous opportunity for both the business and the individual – if done well.  So, let me suggest another way to think and go about managing performance.

Let’s start from the base idea that people go to work to perform.  That’s right – if your organisation offers a good working environment with well packaged work in each job, your staff will front each day with the view to performing in their role.  Where performance management can become an asset is when it builds on this base with transparent opportunities, recognition and linkages to other processes.

So, let’s replace the Performance Management System now with the Growth and Development Management System.  The Growth and Development System will still have the necessary parts to deal with under-performance and will comply with legislative requirements to manage unsatisfactory performance, but this part of the system will not be the focus.  Rather, this system promotes:

  • ongoing feedback which includes praise as well as suggesting improvements.
  • a clear and visible culture of what is expected and what is rewarded – and in what way.
  • ongoing opportunities for staff to contribute to improvement through ideas and leading initiatives.
  • a clear and visible opportunities for staff that benefit both them individually as well as the organisation, for example, flexible work practices, training and development opportunities, promotional opportunities, major project involvement opportunities, to name a few.
  • recognition and rewards.
  • a collaborative culture where everyone can speak without fear or favour.
  • a clear understanding by all as to how their work fits into the overall business and how vital everyone’s best contribution is.
  • an equal sense of value for all efforts and contribution.

Everyone is not the same and everyone’s motivations are different.  A healthy Growth and Development Management System [Performance Management System], operating well in a business, can harness the diversity of your team and motivate them into high performance.  Wouldn’t that be good!

Contact me today if you would like some help!

Recognise and Reward Staff with NO BUDGET

Sally Balwin

Sally Balwin
Recruitment | HR | Business Development

I am regularly asked by buisness owners/managers how to reward and recognise the great contributions of your people with little or no budget to do so.

Firstly, congratulations for wanting to – you are on the road to being an Employer of Choice!

To help you further, here are some no cost suggestions to show them they are noticed:

  • Post a thank-you note on the employee’s or team member’s office door.
  • A very senior person call/visit a team member at the workplace to thank them for a job well done.
  • Greet team members by name when you pass their desks or pass them in the hall.
  • When discussing a team member’s or a group’s ideas with other people, peers, or higher management, make sure you give credit.
  • Acknowledge individual achievements by using people’s names when preparing status reports.
  • Name a continuing recognition award after an outstanding employee.
  • Have lunch or coffee with an employee or a group of employees you don’t normally see.
  • Share verbal accolades. Don’t forget to forward voice mail messages that compliment a team member’s work.
  • Ask a person to teach or share his accomplishment with others as a way of recognizing the person’s ability and role.
  • Ask a person for advice or their opinion; this demonstrates respect.
  • Recognize an individual’s accomplishments in front of peers — yours or theirs.
  • Practice positive nonverbal behaviours that demonstrate appreciation.
  • Make a large calendar that can be posted. Call it the “celebration calendar” and use Post-Its and written notes of recognition tacked onto specific dates to honour contributions made by team members.
  • Give the team member more responsibilities/activities.
  • Allow the team member opportunities for learning and development.
  • Flexible work practices.

Talk to Sally (Balanix Solutions) today for more assistance towards best practice Human Resource Management in your business – (07) 3264 4783.

Do You Lead a Horse to Water or Milk

Sally Balwin

Sally Balwin
Recruitment | HR | Business Development

Reading an old BRW, Giam Swiegers (CEO Deloitte Australia) mentions (in the ad-Defence Reserves Support) that –

We have a saying in our business, “Leadership isn’t about leading people where they want to go, but where they ought to go”

My thoughts are that Leadership would be a combination of leading to the vision, goals and values of an organisation, married with the individual’s personal vision and goals.   The asset we have in our people is their ability to think and the diversity, skills and experience they bring with them to a job.  Great leaders harness this competency and strategically link it in the best way to their organization to maximize achievement/success.

But I don’t think this can be successful if individuals’ motivators are not factored in.

Hop over to Balanix’s Facebook page and share your view.