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.
Chris Deere is the owner of The Alternative Board Auckland South. You can contact Chris on 027 582 2553, [email protected] or connect with him on LinkedIn.
There are many challenges in business that are hard. Many of the challenges facing the owners of small and medium business enterprises (SMEs) are also shared in common by the CEOs of small, under-resourced organisations. Here are some of those challenges:
- There is always too much to do. Deadlines to be met, crises to be dealt with.
- If it’s a new business there will be staff to recruit, systems to establish, new suppliers and customers to be found.
- If you’ve bought a second-hand business or taken a CEO job in an existing organisation, it will be a bit like buying a second-hand car. As you head on down the highway, you’ll probably discover there are a few things under the hood that could do with a tune-up.
- If you’re the business owner or the CEO, you won’t have a boss from whom to seek guidance about the problems that are inevitably arising. It’s lonely at the top.
- On the other hand, you will be the person from whom the staff will want to seek guidance and engage with on a number of levels. If you want a happy workplace you’ll need to be both visible and engaging.
This list of challenges is exhausting, but not exhaustive. So, it’s little wonder that a recent study found that CEOs work more than 60 hours per week on average and that they work both on weekend days and when they’re officially on holiday. The work of a CEO or SME owner is relentless.
In the face of grueling schedules and challenging workloads, the biggest challenge of all is to avoid getting trapped by the daily “urgent” tasks and deadlines of the business to the exclusion of the single most important activity of CEOs and business owners – THINKING.
Because good productive thinking takes something that CEOs and SME owners lack most – TIME.
Irrespective of how successful a business is, there is always a lot to think about:
- Business planning issues – strategies, goals, objectives (including tracking performance)
- Resourcing issues
- Monitoring the changing operating environment
- Dealing with various business shocks
- Improving organisational culture
- How to be more effective as a CEO or business owner
- Anything that’s keeping you awake at night.
Some people say that good productive thinking takes not only TIME but also SPACE. That’s why some management teams go offsite for periodic meetings or planning retreats. No matter how busy a CEO or business owner is dealing with the day-to-day operations of the business, it’s important to regularly get out of the business and put in the thought required to work effectively ON the business.
The time spent doing the hard thinking always pays dividends – more time devoted to productive thought about the business will make every other aspect of the business easier and less time-consuming.
Would you rather spend your time dealing with day-to-day crises, or avoid most of those crises by thinking about the business?
If you could spend more time thinking and less on the daily business grind, what are the issues that you would like to solve first?
Our business owner boards provide the environment to regularly step outside your business and do some hard thinking. Click here to find a board near you.
Warren Olsen is a Business Coach and Facilitator with The Alternative Board, Auckland North. You can contact Warren on 027 264 9443, [email protected] or connect with him on LinkedIn.
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!
Scott Morris is the owner of The Alternative Board Auckland East. You can contact Scott 0n 021 686 696, [email protected], or connect with him on LinkedIn.
Unintentionally, many of us allow our good people to resign. And then resort to recruitment to find other good staff.
At times like this, when it is hard to find good people, this is not particularly effective…
What if, instead, we reviewed our retention policies – not after a staff member has resigned, but before?
What if we were proactive about it – and made retaining good staff our highest priority?
If we did, what might this look like?
- We could treat people as our equal – as worthy of our trust and respect
- We could find out what matters to them and offer this, or the chance to pursue it, where this is possible
- We could ask them for input on improvements to their area of the business – and let them know we value their input, while improving the company
- We could let them know we appreciate them, as people, as well as for their contribution to our business
- We could offer them flexibility in those areas where our business can sustain it, so that as far as possible, they can live their life the way they want to
- We could be open and transparent, and make it safe for them to be open with us
- We could regularly let them know how well they are performing – and support them to improve their performance – so they can meet their (and our) standards
- We could create a team environment, where people feel they belong
- We could find ways to be more generous – recognising that when we give, we receive more in return
In short, we could value them.
We all instinctively know the importance of this. But how often do we act on it?
Karen is the joint owner of The Alternative Board Auckland West. You can contact Karen on 021 447 584, [email protected], or connect with her on LinkedIn.
Keeping calm and carrying on – that’s the current steady stance of small business owners despite the backdrop of rocketing Omicron cases, disruptive protests and ongoing uncertainty.
In The Alternative Board’s Summer Pulse Check, nearly two-thirds of business owners report their confidence is holding steady in the face of ongoing challenges.
For many, this confidence is lessened by government policy and economic conditions, although in contrast, a smaller number report that government policy and economic conditions improve their confidence.
Three-quarters of business owners report they are having to manage labour issues, including skills shortages, juggling staff absences or retention. The vaccination rollout has not had a huge impact on their workforces or businesses – a small number report staff losses but for the majority, it has been business as usual.
After last year’s lockdown stresses, when our Spring Pulse Check showed owners were at their lowest ebb since the start of the pandemic, the summer has seen business owners rally, finding ways to manage uncertainty and pandemic pressures. Chief among the stressors are rising input prices with lack of sales and supply chain issues not far behind.
To get through 2022, business owners are looking for more government or financial support however recent changes to lending conditions has not had an impact. Working capital and customer relationships are also holding steady and while the future isn’t bright, the current pulse is stronger than at the end of 2021.
You can download the full results here and access all the Pulse Checks here.
The Alternative Board supports small to medium sized businesses and their owners through advisory boards consisting of other local business owners, expert one-on-one coaching, a suite of business planning tools and business mentoring.
The Pulse Check is run as a regular monitor of the sector. The Summer edition went to 3520 of our members and associates between 18 – 24 February. Results have a confidence level of 90% and a 5% margin of error.
Alfredo Puche is the owner of The Alternative Board New Zealand and the area franchisee for Nelson and Marlborough. You can contact Alfredo on 027 427 9172, [email protected], or connect with him on LinkedIn.