Finding and Keeping Good Employees

Wednesday, February 07 at 02:00 PM
Category: Arvest News

The following article is republished with permission from the Feb. 8, 2018 edition of the Northwest Arkansas Business Journal.


When I am visiting with local small business owners about their biggest challenges, the majority of them answer, “Finding and keeping good employees.”

As unemployment rates in Northwest Arkansas have declined and stayed at historically low levels, the issue of finding and keeping good employees has required more attention and resources from employers. This significant variable in the business equation is one to pay close attention to when considering starting a new business or major change in one’s business.

When putting together a business plan, many will plug an arbitrary number into the “payroll” line item without digging into what makes up the line item. Expecting even average performance from an employee may cost you much more than the hourly wage estimations from the region. The expectation of average performance (and many owners expect more than just average) from average pay may not be met.

As current and potential business owners are working through their labor projections, they need to ask themselves some critical questions:

  • Do I fully understand the day-to-day operations of my business and what my current (or future) employees are doing?
  • Do I have clear guidelines for duties and performance for each of my employees? Were expectations made clear when the employee was considering employment? Have these been communicated clearly and frequently?
  • How involved will my employees be in the strategy of growing and improving my business? Do my employees understand how the business makes a profit and ways to increase the margins? Do I have incentives in place for this behavior? Do I share bottom-line performance with my employees or is it kept a mystery?
  • Will I give employees financial and operational responsibilities that are not overseen (e.g. bank deposits, reconciliations, customer invoicing and collections)? Do I have a system of checks and balances in place for certain critical duties, and are these procedures reviewed regularly? Do all employees and contractors (payroll, accounting, etc.) know that I will be auditing transactions and documentation on a regular basis (This happens much less than you think, and to dire consequences)?
  • What are the key skills and traits a good employee needs, and am I ready to train the rest?
  • Am I passionate about the mission of my business and can I effectively convince my employees of the same?

This may sound like a lot of work, but a business will not be successful if it does not have the right people in place working toward the same goal. If, as an employer, you do not have a clearly articulated mission and clearly defined expectations, you will spend greater time and resources on frequent employee turnover, and expose the business to unnecessary reputational, operational and financial risks.

Loyal, energetic and easy-to-teach employees have always been in high demand and – with reports indicating 90% of small business owners plan to hire 1-2 new employees in 2018 – the competition for these individuals will become more intense.

Potential employees have options. Employers will need to do some soul-searching as to what makes their business special and unique. Employers will also need to be creative with how they incentivize their employees and possibly, how they require labor from them.

  • Does your employee need to work 8-5? Can the work day be defined differently, but still achieve the desired results?
  • Can the business achieve its goal by supplementing the existing staff with key, industry-specific experts (e.g. marketing, human resources, accounting and finance)?
  • What motivates your employee? It may not be the almighty dollar, but a more flexible schedule with a chance to take four weeks off and bike the Great Divide Trail.
  • How does your business contribute to the world in a way that improves it? Will your employees feel they are part of a larger, socially conscious movement?
  • Are you communicating with your employee about how their individual performance is contributing to the overall goal and success of the business? Do they feel like they are making a difference?

As you contemplate the new year and what it means for you and your business, make sure you are spending the time and deliberation required for your employees. They are so much more than a line item.

Eileen Jennings is a commercial lender for Arvest Bank in Fayetteville. She can be reached by emailing ejennings@arvest.com.

 

Tags: Financial Education
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