With the tightening labour market and increasing pressure on businesses to retain staff, a greater emphasis needs to be placed on developing effective staff retention practices. This includes developing strategies to minimise staff turnover, succession planning for key staff and ensuring staff are provided development opportunities in accordance with their interests and ambitions.
The pressure on the labour market is compounded by low immigration numbers, a lack of international visitors on working visas and ‘the great resignation’, often referred to as the ‘big quit,’ an international trend where significant number of workers have left their jobs during the Covid-19 pandemic. Poor treatment at work is a key contributor to the great resignation, with the pandemic exacerbating already-toxic workplace cultures in a range of businesses.
Another factor is the changing behaviours of each generation. Think back to our fathers where it would not be uncommon for them to stay in one career for their entire working life. Compare them to the current generation who are more likely to seek change so may experience a number of career changes over their working life.
In order to mitigate the impacts of a more ‘transient’ work force a number of businesses are now adopting a new employee engagement strategy referred to as ‘stay interviews.’ It is a standard process in many businesses to conduct exit interviews for staff that have resigned and while these can be effective in providing information relating to the reason why an employee is leaving, it is a reactive approach and in the majority of cases ‘the horse has already bolted’.
It makes better sense therefore to adopt a proactive approach and interview staff while they are still employed. A ‘stay interview’ will help managers to understand why employees stay but also what may cause them to leave. They will get a better understanding of what motivates the employee as well as where their interests and aspirations in the business lie.
‘Stay interviews’ are best conducted in a casual and conversational manner by a third party to ensure the employee feels comfortable to talk about things that they may not feel comfortable discussing with their Supervisor, Manager or another member of the organisation.
There are several benefits to developing and maintaining a ‘stay interview’ program:
They provide an opportunity for an employee to be heard, which is a great engagement strategy in itself.
They demonstrate that the business values their opinion, which promotes trust and loyalty.
They demonstrate that the business is serious about improving, which is motivational to employees.
They provide valuable insights for the Business Owner that might otherwise be missed.
They reduce the risk of valuable staff leaving.
They identify areas of interest and development for employees.
They provide valuable information for the business to incorporate into their business strategy.
If you think “stay interviews” are worth exploring further take a read of DRA Safety‘s testimonial on the Testimonials page of our website.
Employees rarely leave employers that they like and respect.
If you have a one-person business, then you do it by yourself. Maybe you trade securities on the exchanges that facilitate that trade, or you have a drop-shipping business and sell stuff on Amazon or Shopify. There are many examples of great one-person businesses.
But most businesses are not one-person businesses. They range in size from small businesses that involve two or three people right up to large corporations that employ hundreds or even thousands of people. And one of the most important assets that these businesses all have is their team.
Why The Team Matters
The team is the single most important factor in determining success. A dysfunctional team can destroy any enterprise, no matter what other factors that it has in its favour whereas a great team that’s focused on its goals and objectives, and works well together, will prevail even in very difficult circumstances.
So it’s well worth putting time and effort into building the best possible team that you can.
When it comes to teamwork, sports analogies are just too apt not to embrace – so think about the ALL BLACKS.
Every team has a culture and it’s better for the business owner or CEO to be proactive in fostering a positive team culture, rather than hoping that the right culture will develop organically.
Most successful businesses have a written business plan, and it’s important that’s shared with the team so that everyone can focus on achieving the business’s goals and objectives. But it’s also useful to document the characteristics of the team culture that you want to achieve and rules for how the team should interact. This will help in several ways:
The documentation task will assist in clarifying your thinking about culture.
It will provide a reference point that the whole team can use.
It will help inform staff selection.
It should be used in staff induction.
The culture needs to:
Provide a safe environment where team members feel free to ask questions, make (and own up to) mistakes, challenge ideas and each other
Foster trust and mutual respect
Encourage open communication and the sharing of skills and knowledge
Encourage staff development through training and the acquisition of new skills.
A positive workplace culture will boost morale and employee satisfaction, and foster camaraderie and loyalty. This will increase productivity, improve customer experiences (happy employees will interact far more positively with customers as well as with their coworkers), lower staff turnover, and, assist in recruitment.
Staff Recruitment and Selection
To build a great team, it’s important to put time and effort into rigorous selection. Think about the ALL BLACKS again.
Sound recruitment practices require some investment of both time and money. But failing to recruit well can be even more costly in terms of damage to your team and your business. It is generally better to put in the time, effort, and money to recruit and select carefully.
Here are a few principles that have worked well for me:
Ensure that anyone that you hire is a good fit for both your team and your workplace culture. While you may require certain skills and experience a good fit for your team (and a great attitude) may be even more important. Many gaps in skills can be adequately addressed by training and on-the-job mentoring and skills transfer. It’s much harder (and often impossible) to fix a bad attitude.
Resist the temptation to hire people like you. We all tend to have this bias, but it really does take all sorts to make a world and a good business. Diversity will bring more different perspectives and contribute to increased productivity, greater innovation, and better decision making.
Make sure that your induction process for onboarding new employees includes a session about your business’s values and culture. This is best delivered by the owner or CEO as this will help to emphasise its importance.
Embrace the culture and model the behaviour you desire
Make everyone feel safe.
Be sensitive to the feelings of others. Provide validation and support where necessary.
Don’t ever discipline any employees for making a mistake. Assure them that it is okay to make a mistake and help them to fix it.
Admit to your own mistakes.
Communicate openly and with respect.
Challenge people, and also encourage them to challenge you if they think you might be about to make a mistake.
Build the team through team events
Team meetings and other events are essential to building team spirit and a sense of belonging. So have regular team meetings with real tasks ensuring team input – not just “information sessions”.
Make sure that all members of the team get an opportunity to have their say.
Always thank your people for their efforts, and praise their achievement of jobs well done.
Encourage cooperation and help people to trust each other.
Team social events are great but group training can also be a good occasion for team building. Other events can include birthday morning teas, Friday after-work drinks, karaoke nights, etc.
Listen to your team, and don’t micromanage
As the leader in your business, you need to give constructive criticism where it is due. But this should always be done respectfully and in private and in the spirit of helping them to grow.
Listen to your team. If you have been giving them the right encouragement to challenge you, they will help you to avoid mistakes.
Don’t micromanage. If you’ve hired good people and provided any required training, there is no need. It will also destroy trust, lower team morale, and reduce people’s confidence.
Members of The Alternative Board are in the fortunate position of being able to access the collective experience and knowledge of their fellow members. A confidential and trusted environment in which your team issues can be discussed is just one of the benefits of membership. Contact us to find out more.
Rising input costs are biting into cashflow for many businesses and, as we know, if the cash dries up, other problems follow thick and fast. How we manage our cashflow in tough times is a challenging question for business owners but – as with most things – a good plan can get you on the right track.
If you’re looking to improve your cash position have you thought about how you can take stock of your products and services and focus on areas you can improve?
With this in mind, do you have in place?
A cash target i.e. two months of core capital, (two months of Labour & Operating expenses)?
Processes to improve cash on hand (see some ideas below)?
Regular Forecasting, to predict future Profit and Cash positions?
Cash flow management goes hand-and-hand with business management. If you’re looking to improve cash in your business try the following suggestions;
Focus on it – without cash, you fail!
Look for ways to constantly improve your business.
Shorten the cash cycles (the time period between when a business pays cash to its suppliers for inventory and receives cash from its customers). In other words, speed things up.
Following is a list of suggestions that could improve cash in your business. See which ones might work for you.
A daily Cashflow statement so you see what has come in, what has gone out, and what requires attention today
Adjust your billing process to ensure you aren’t missing any money owed to you and to get everything on a schedule.
Send friendly reminders to clients prior to deadlines.
Look at your terms of payment, and offer incentives for alternative methods of immediate payment (i.e. direct deposit).
Check for customer satisfaction as soon as jobs are completed, and send invoices immediately
Ask for better credit terms from key suppliers or see what expenses you can pay with a credit card (you still have to pay, but you may be holding your cash for longer)
If you are achieving 10%+ Net Profit over a longer-term (Rolling 12 months) your cash will be improving.
As inflation is rising, adjust pricing and look to improve margins and profit.
Ensure your Labour productivity is improving: $ of Gross Profit for every $ of Labour
Forecast Profit and Cash using sales and the true margins from your business
Rolling 12 numbers: COGS %, Direct Labour, Operating Expenses.
Assumptions are constantly changing so keep it updated, we suggest a re-forecast every three months and set 90 Day Goals for the next Quarter.
If you would like to improve profit and cash in your business, reach out to The Alternative Board. We offer NumerEyes reports to assess your business and work with you to achieve your Profit and Cash targets. And If you have any other ideas for improving cash in your business please let us know!
With the thought of another year of uncertainty around the Covid pandemic along with continued supply chain and staffing issues, more business owners than ever are starting to think about life after business.
As business owners return to work against a backdrop of holiday-based tight cash flow and start the planning process for 2022, many are considering what an exit strategy might look like.
Steve Wilkinson, of the Alternative Board Christchurch, has observed more clients than usual are starting to look for the exit.
“Even fresh from their holiday a lot of my clients are struggling to find the energy for another difficult year. We’re talking about options and there are more conversations around selling and finding other solutions to take some of the pressure off them”, he says.
“While most of my clients have been financially successful this year, despite the impact of Covid, the journey they have been on over this period has been met by new challenges not previously experienced. These challenges have necessitated better planning, increased costs and a lack of certainty about what the future brings.”
A continuation of this uncertainty, increased costs as supply chain and staffing issues compound, and a steady decline in resilience, is creating a feeling that now is the time to move on.
In addition, the emotional toll of handling the highly charged views of both sides of the Covid debate is something that is new to those business owners affected and, difficult to manage.
When emotions are running high it’s never a good time to contemplate selling a business, particularly if the business is not set up to achieve maximum value from its sale. Steve Wilkinson says “At the Alternative Board, part of our involvement with our clients is to continue to build ongoing strategies around longer-term exit plans to ensure that if exit becomes a discussion point, the business is well placed to explore those exit strategies, of which sale is only one option.”
“As most business owners know, there are many factors that impact on the overall value of a business, and it is often too late to address those issues at the time of sale,” he says.
“These factors need to be addressed as early as possible and plans put in place to mitigate where practical with a view to setting the owner up with options when, and if, an exit strategy needs to be considered.”
In summary, the message for all business owners from what is happening at present is to ensure that they continue to build strategies that enhance not only the value of the business but the saleability. This is in turn provides more flexibility in times where current thinking around exit is more prevalent.
The Alternative Board is a provider of business advice, planning and coaching systems to business owners, CEOs and Managing Directors. Our business owner Advisory Boards expand thinking beyond particular industry providing different perspectives to spur new ways of doing business based on real world experience.
The summer holiday period is an ideal time to reflect on your personal and business visions.
2021 was a tough year full of many challenges for most business owners. Some businesses were closed due to COVID restrictions; others had their employees working from home. There were supply-chain issues, staff shortages, and difficulties maintaining contact with customers.
The problem with tough times is that they can lead to feelings of woefulness or despondency, and nothing can undermine lives and businesses as quickly as negative feelings and negative mindsets. So, it will pay benefits to start by reflecting on the many things that we can be grateful for. And there are always many reasons for gratitude:
Gratitude for our families and friends (even though pandemic-related restrictions may have changed or restricted our interactions with them)
Gratitude for the many small and large kindnesses that we have received.
Gratitude for the gift of life is the primary wellspring of many religions
Gratitude for the tough times in our lives that help us to appreciate the good times.
The list of causes for gratitude could be never-ending.
As I get older I suffer the aches and pains that come with my age and I live with the knowledge an incurable illness has reduced my life expectancy. But I’m grateful for the wonderful life that I’ve already had. Even in the toughest times of my life, there has always been food on my table. I have travelled enough to know that that makes my life bounteous compared to the lives of most people on our planet.
It was tough in 2021 to be separated by travel restrictions and public health regulations from some of our beloved family and friends. But many of my grandfather’s generation were also separated from their loved ones when they were sent (as volunteers or conscripts) to the Great War, and they spent months or years in filthy rat-infested trenches where they were exposed to bitter cold and wet conditions, live gunfire and artillery fire, and diverse diseases such as dysentery, cholera and typhoid fever. I am grateful that my separation from my loved ones was spent in relative safety and comfort, isolating at home on my sofa.
I’m grateful for Skype and Viber and Zoom and such-like modern telecommunications that helped us keep in touch with those dear to us even through the lockdowns.
I’m grateful for my feelings of gratitude because it is my experience that:
Gratitude increases my happiness and strengthens other positive emotions
Gratitude increases my energy levels
Gratitude makes us more resilient and helps us to bounce back faster
Gratitude helps our relationships
Gratitude increases our productivity
Gratitude helps us to network, helps us to make friends, and deepens friendships
Gratitude improves my decision-making and increases productivity
Gratitude has made me a more effective manager
Gratitude increased my goal achievement.
When grounded in gratitude and positivity, the holidays are an ideal time to reflect on those big-picture personal and business visions.
Do you want more from life?
Do you want more time with your family?
Do you want more time pursuing certain activities or achievements (and is your “bucket-list” up-to-date?)
Do you want better health and/or deeper relationships?
Is your business helping you to achieve your personal vision? And how could things be improved to bring your business vision more in line with your personal vision?
The tough times that we have experienced during 2021 may well have changed your views on a number of matters, and the holiday period is an excellent time to consider whether your personal and business visions should be updated in the light of changes.