Employment issues were top of mind for business owners in our most recent Pulse Check report and those issues come in all shapes and sizes.
Every workplace has seen tremendous upheaval in the last year and there are more upheavals to come as employers find themselves having to develop vaccination policies, infection control procedures and other measures designed to keep staff safe and their business operating.
These upheavals, complex as they are, have been easier for some businesses to manage. Why? Because their company culture has been considered, crafted and nurtured so their values are lived every day by everyone in the business.
A healthy workplace culture creates happy workers – and happy workers work better than miserable ones. That may seem obvious but it is surprising how many businesses – large and small – fail to think about the employee experience, the culture and communication.
Company culture starts at the welcome mat. A good culture eases the recruitment process as it attracts people who want to stay for the long term, rather than the job being a short step up the career ladder.
Positive experiences in the workplace lead people to stay longer with a company. This creates stability, reduces staff turnover and, in the long term, recruitment costs are reduced.
Other advantages include enhanced performance, greater collaboration and a deeper understanding on the part of the employees as to the issues facing the business – so when a crisis hits, or a pandemic breaks out, everyone deals with the situation together, often contributing beyond expectations.
Encouraging a positive workplace culture can be tough for small businesses that are growing bigger, not because there is a reluctance to do so but because it is often hard to know where to start.
At The Alternative Board we have tools and techniques to help business owners look carefully at their culture and build the type of workplace where people can’t wait to start the day. If you’d like to know more let’s talk about the ways to create a healthy, happy workplace.
Often in business, we size up a situation and become determined not to be worse off but in so doing we lose focus and miss out on creating successful outcomes.
It comes down to mindset. Are we actively looking objectively at strategies that put us in a position of strength or are we setting minimum standards and fixing mistakes as we go so as not to fail? It takes foresight and effort to plan to win. It is about proactively weighing up strategies that have risk but are calculated to provide a greater benefit. It is about learning and adjusting as we go.
At a recent peer-advisory board a business owner was faced with a $6,000 “expense” that could be eliminated. A wise choice – reducing expenses – because as confirmed in our recent Business Pulse Survey there are dark clouds on the horizon for New Zealand businesses. But during discussion with other business owners on his advisory board – the return on the $6,000 “investment” would add $70,000 p.a. to his net profit and by analysing and taking this path he would become more motivated to grow his business during a downturn. Also, with the opportunity to double the “investment” to $12,000 he could add $140,000 p.a. to his net profit in these troubling times. Sure, this is not a given – he still needs a defined goal, strategy, and action plan to achieve it but that’s what planning to win does – it makes you put in place a plan to take advantage of opportunities. Planning to not lose is reactionary and cautionary and can gradually stunt business growth. It avoids the need to be visionary, create a plan, and be held to account and often the business owner who finds themselves in this reactive position is there because of difficult circumstances and lack of motivation or encouragement. Are you planning to win – or, subconsciously, doing just enough to not lose?
It’s a rocky road for employers these days – one day it’s a COVID19 alert level change and the next we’re dealing with an earthquake. Much support has been given to employers to help them through these times but have employees been properly supported by all the processes and systems we’ve seen launched since COVID19 first made its presence felt?
A couple of weeks ago the national alerts sounded following the earthquakes – particularly the big one in the Kermadecs – and many employees were sent home. The question is, were they sent home with or without pay? What were their expectations of their employer in that particular emergency? Did they expect to be paid for the day even though it was unlikely they would return to work until the emergency had passed? It’s hard for businesses to bear that cost in the current COVID climate yet, if employees don’t know what to expect from their companies when emergencies occur, how will that affect their relationship with the business? As we know, one of the many COVID fall-outs is the lack of skilled staff – so will poor communication or unclear policies lead to staff losses?
All these questions take us back to the topics of contingency planning and internal communication. In between emergencies – which seem to come thick and fast – it is worth taking some time to work out how your business is going to manage employee expectations. As businesses grow, it can be hard to maintain good internal communications but it should always be a priority. Strong businesses are strong from the inside out. Internal communication that helps employees understand emergency processes – from where to head when an alarm goes off to expectations around pay, sick leave and holidays – is essential for a business to thrive.
All businesses – large or small – should communicate constantly with their staff. That way when the unexpected does happen, what comes next is no surprise. Physically, when the tsunami warning sounds, we all want to be high and dry but nobody wants to be left high and dry financially. Forward planning, understanding your cash flow – getting inside the numbers – building reserves where you can, all help you, as a business owner, survive the storms and make sure your employees are sheltered when the going gets rough.
New Zealand’s small businesses are known for their ‘family feel’ and the majority of business owners create a work whanau where trust and respect flourish. This is often the result of good internal communication backed by great business planning on the part of the owner. If you are a young business, a growing business or even a larger business that may have lost touch with its employees and their expectations, the advice would be take a moment and sort out your policies today then let people know what to expect and when. Being prepared for the next emergency and knowing how you are going to manage the situation is all part of our new reality where the unexpected is the norm.
‘Year-end’ – just who is it good for? Absolutely no one – except perhaps the IRD and accountants. ‘Year-end’ exists for tax purposes only, is set by governments and is purely to determine your tax liabilities.
It is a necessary compliance exercise, normally done by an accountant on your behalf, who may well have no connection to you as a business owner. The irony is that the numbers we report at ‘year-end’ – often several months afterwards – document our ‘history’ and are not the ones we need if we want to really understand our business.
Every ‘year-end’ should be a beginning. We should keep our eyes on the numbers every day and those numbers should speak to us all the time. Get them to pop off the page and tap us on the shoulder so we pay attention and know what they’re up to.
When a small business is born, the focus tends to fall primarily on cash flow, sales and immediate costs which means some indicators as to business health are missed, ignored or simply unknown. It’s easy to get caught up in jargon but there are a ‘number of numbers’ to consider. Labour efficiency ratios, for example, may sound complicated but they help us to understand productivity and the value and return achieved for every dollar invested in wages. Looking at our figures on a rolling twelve-month basis allows us to keep our finger on the pulse, build confidence and make strategic, proactive decisions.
Here at The Alternative Board, we have the tools to help you understand your numbers so you can make sound and timely decisions about your business. Advice on tracking your numbers, your business performance and business improvement is how we help you make a new beginning and a fresh start every month.
The reality for business owners is that keeping a close watch on your numbers will not only help you predict sales, trends and downturns, it will help you prepare for a crisis, develop business continuity plans, allow you to ‘expect the unexpected’ and deal with it accordingly.
Our dynamic tool to help track your historic and forecast financials is one I would highly recommend. It provides a current and accurate picture of where a business owner is now so the right decisions can be made. Rolling reports show trends and highlight the numbers that matter every day.
In April – alert level changes permitting – I’ll be running a workshop for business owners interested in getting to the root of their numbers. If you would like to come along, get in touch (contact us) and let’s start a new beginning together.
We’re not immune to employment issues here in Northland and one of the areas we frequently discuss at our peer board meetings is how to overcome the skills shortage in the region.
Employment issues are one of the top stressors for business owners in the small-to-medium sector, as identified in our Summer Pulse Check, and although Northland has managed to maintain a reasonable economic performance through the first stages of COVID19, our people shortage persists. One certainty we have is knowing that it helps to talk through such challenges with like-minded business owners – which is where The Alternative Board comes in.
Together, we’ve looked at solutions to the skills shortage ranging from partnerships with educational establishments, more apprenticeships and building company culture to sponsoring potential employees to help them gain the skills they need – and we are still exploring other initiatives that may help us bridge the gap.
As well as identifying the stressors, the Pulse Check discovered what would most help business owners get through this year – 43% said a chat with other business owners and specialist advice would be just the thing and is another area where working with a peer board provides a solution.
Big companies pay a board of directors to provide advice and solutions but private business owners don’t have that luxury – they have to figure things out by themselves which can be tough, stressful and quite lonely. The Alternative Board is exactly what it says it is – a small, confidential alternative to the traditional board of directors. In Northland, I bring together non-competing business owners and leaders who then work together to solve the challenges and opportunities we all face running our own business – whether that’s staffing, funding, cash-flow, sales, input costs – all the issues across all the sectors. I facilitate the groups and together we support, develop and grow our businesses, helping each other succeed.
To help people decide if this approach will help them, we run what’s called a ‘sample board’ – essentially a ‘try before you buy’ session – so if you would like to chew over some of Northland’s business challenges or drill down into the nitty-gritty of your business call me and let’s tackle the stressors together.
Confidence is high among our business owners as they come to the end of the summer rested and ready to tackle the significant challenges ahead.
Our Summer Pulse Check – full results here – told us that business owners were rested and recharged but there is growing unease over rising input prices, port disruptions and employment issues.
Confidence is extremely high but there’s no illusion concerning what’s ahead. Results showed a rise in problems associated with working capital, including more late payers, input price rises and disrupted supply chains.
Delays at the port are a major cause of stress along with employment issues and lack of sales but business owners remain buoyant, with plans and ideas ready to take them forward.
Businesses have steeled themselves to constantly expect the unexpected, adapting and changing their business operations to manage the shifting sands of COVID19 alert level changes.
We were a little surprised that confidence remains so high as people were responding to the Pulse Check as Auckland went to Alert Level Three but having survived 2020 and with the vaccination programme about to start perhaps the confidence of Kiwi business owners comes from knowing they are resilient and can adapt to most challenges that come their way.
Confidence boosters included skilled Kiwis coming home as the struggle to fill jobs continues and high on the wish list are more customers and better cash flow. Steps to reduce costs appears to have helped to ease the pressure.
When asked what would help get through 2021, 43% of business owners said a chat with business owners like themselves or some specialist advice would do the job – and that, of course, is what we are here to do. We exist to support small to medium businesses and their owners through the calm and the storms and the insights you share through the Pulse Check allows us to make sure that support and advice is relevant and timely for you and your business. Thank you for taking part – our next check will be in the Autumn – and in the meantime, remember we’re here to help.