Welcome to the mid-winter blahs. Despite the recent spell of sunshine, it still feels dark, grey, and dreary! Bleah! It’s not going to help either that this introduction is a little longer than most! However, for the extra 30 seconds it’ll take to read it, I think you’ll find it most helpful! J
I know! This is so NOT how one is supposed to introduce a peppy, upbeat, and positive newsletter like our Small Business Success! In my defence, it is apparent that the February ‘blahs’ are in full flight today!
Which brings me to today’s topic – ‘denial’! Okay, that was a pretty big leap but you’re a small business owner, you’re quite proficient at working long, hard hours with little more than ‘faith’ to motivate you!
So who’s in denial? Well, sorry, but perhaps…you are! Consider this Dilbert: http://dilbert.com/strips/comic/2012-01-25/
I’d wager, and it’s a pretty safe bet, that the majority of small business owners consider themselves to be great bosses! While I haven’t done a formal study on the issue, I do have over 20 years working with such entrepreneurs. My experiences tend to bear out these comments, and those that follow.
Actually, perhaps you ARE a great boss. However, over the past couple of days I’ve become privy to a number of situations that are causing me to ask myself whether small businesses, who should EASILY be able to offer a better work environment than their larger counterparts, are in fact maximising this potential advantage to the fullest. Consider the following:
An owner at one small business had a tantrum that culminated in one employee hiding under her desk while a stapler was thrown AT HER from across the room;
Another owner yelled loudly so the entire office could hear her request that ‘somebody’ tell the employee to whom she was directing the tirade, how to do her job properly;
And a third employer had a reputation for screaming and yelling at employees in very public areas for procedural ‘mistakes’ that had been made when employees followed poorly documented protocols that ultimately lead to undesired and unintended outcomes.
Where, under the phrase, ‘staff motivation’, do you think the above instances fit?
Now, consider the following:
1. Many small business owners believe they cannot afford to pay what larger companies give and that when they pay less, they will ultimately lose that employee. So they unconsciously conduct their inter-personnel activities accordingly (ie. with a short-term viewpoint) to the detriment of the business;
2. Many small business owners complain that once they make the expense to train their employees, these same employees leave the company for better paying jobs. Perhaps it even happens this way sometimes. By the way, have you EVER offered a job for life? In any case, when exiting employees are interviewed by a third party (as opposed to the owner asking, ‘Why are you leaving?’), the #1 reason for departing is not lower pay, but the owner’s personality and attitude;
3. However, because they fear losing employees to better paying jobs, many owners don’t invest the necessary time and resources into properly training their people. There are many problematic outcomes to this approach including lower productivity and output, poorer customer service experiences, and employee frustration … which almost without exception will lead to their eventual departure;
4. Many employers pay minimum wage believing that they cannot afford to pay more. All minimum wage is guaranteed to get you is a minimum effort. It’s not the amount of the premium that matters here, it’s the fact that by paying an extra quarter an hour you prevent an employee from excusing minimal or low effort with the rationalization, ‘Hey, I’m just getting paid minimum wage here!’ Ask yourself, ‘What would even a 5% productivity boost do to your bottom line?’ Do you think it might cover the extra two bits an hour? I’m guessing, ‘Yes’;
5. The majority of employers believe that high pay motivates employees best. However, in a ‘Small Business Magazine’ survey from several years ago, this motivator was at the bottom of the list. First on the list was, ‘an appreciation of the employee for the work being done’;
Why does all this matter? How do human resources affect the typical small business? Simple. Despite the lack of a budget line item called, ‘turnover costs’, these expenses are real and may be approximated. In general, a company with a 25% annual turnover rate incurs the equivalent of about 9% of its revenue in additional costs (Yikes!). On an employee basis, and this may be somewhat industry specific, most research puts direct turnover as costing between 25% and 50% of the annual wage paid.
To paraphrase one of our former Prime Ministers, ‘The proof is the proof!’
If you are having HR difficulties, perhaps the first step towards a solution is to look in the mirror and figure out what kind of boss they have!
And since here in Ontario, there doesn’t seem to be an ‘Employee Appreciation Day’ per se, let’s piggyback on the U.S. where the first Friday in March is recognized as ’Employee Appreciation Day’. This seems like a good idea until an Ontario day is officially designated. This year it’s March 2nd. On this day, buy a couple of pizzas for your staff’s lunch, then use it as a de facto starter’s pistol to launch a SIMPLE human resources planning effort. One that will convert your employees into revenue-generating Mastodons (!), help improve morale, and in due course, turn your company into a better place to work. With all these positive results, could a healthier bottom line be far off? For a couple hours of your time, is it worth it to reduce your costs by 9%? Or, your wages by an even greater percentage … without cutting anyone?
Perhaps the first idea in your new human resource plan should be a reminder from Confucius of your goal: ‘Choose a job that you like and you will never have to work a day in your life!’
Enjoy the first ‘Small Business Success’ of 2012!