By: Roberta Chinsky Matuson
The numbers don’t lie. You thought end-of-quarter sales would make up for a slow start, but unfortunately business isn’t as profitable as you had hoped. There are some tough decisions to be made and how you make them will have a lasting impact on the viability of your business.
Here are some tips on employee engagement, employee retention and employee turnover to help you revitalize your entrepreneurial strategy:
Get Out from Behind your Desk
Pat Lynch, president of Long Beach, California Business Alignment Strategies, Inc. finds that business owners mistakenly hide under or behind their desks until the storm blows over. “Volatility is here to stay,” notes Lynch. “Owners need to learn to manage it; otherwise they will be waiting for something that never will return.”
Do a better job with your sales talent management by finding out what can be done to accelerate revenues, accounts receivables and overall productivity. Observe firsthand where the slack is in the system before dictating staff cuts throughout the organization.
Phil Symchych, president of Regina, Canada based Symco &Co., recommends identifying ways to increase value and enhance your company branding rather than making the all too common mistake of focusing internally and reducing expenses. “You’re not going to win a race with your foot on the brake or by selling your engine!” exclaims Symchych.
Think Before Reducing your Workforce
Lynch challenges business owners to shift their mindset and language -- i.e., think of investing payroll dollars most effectively for the greatest ROI instead of cutting costs. Lynch notes, “There is a limited potential for the latter but unlimited potential for the former.”
There are hidden costs of employee terminations that small business owners may not realize until it is too late. This includes a decrease in employee morale that can lead to a loss of key customers, as well as a decline in productivity. Lynch points out that layoffs can result in bad public relations for the organization, both as an employer and as a community “citizen”. There is also the irreplaceable loss of institutional knowledge that departs along with exiting employees.
Symchych believes one of the biggest consequences of layoffs is the unintentional but unavoidable situation of piling work on the remaining people and risking their leaving your company due to stress and added workload. “Good people are always employable,” observes Symchych. “Don’t abuse yours.”
Managing your Way to New Business
Symchych challenges business owners to think and act aggressively as they have the nimbleness to outsmart and outsell their larger competitors. This economy is a huge opportunity for you to develop or recruit large company employees that will propel your business ahead and acquire new customers.
“Talent management isn’t about cost reduction, it’s about gaining long-term strategic advantages to accelerate profitable growth,” states Symchych. “Don’t let the accountants shrink the future.”
Often times the best people who can help you out of this difficult situation are the people on the front lines. Ask them what new products and services can be offered to increase revenues. Find out what can be done to improve efficiencies. Remember to acknowledge ideas and suggestions and reward where appropriate.
Symchych suggests documenting all your policies and procedures, often the antithesis of small businesses who are trying to avoid bureaucracy. This helps accelerate training and improve workflow, which may help you avoid having to avoid making cuts or cutting deeply.
When All else Fails…Measure Twice, Cut Once
Too often business owners start slashing headcount without giving enough consideration to employee retention and the implications of their actions. If you have to make the tough decision of reducing head count, put together a plan. This will help you avoid having to go back in and cut again.
“Retain your most experienced people who understand your business and have strong customer relationships,” advises Symchych. He also recommends making sure all key positions have a successor who is being groomed; you never know if the mere mention of layoffs will send others packing.
When putting together a transition plan, Lynch recommends retaining top talent who staff critical jobs (i.e., jobs that, if not staffed, would prevent the company from fulfilling its mission) and who have critical skills.
A Little Change Goes a Long Way
Most small businesses cannot afford to offer the same type of outplacement packages commonly associated with big businesses. However, this doesn’t mean you can’t do something for those leaving. If possible, at a minimum pay employees for the notice period you would generally ask them to give when resigning. Use your network to make introductions to those employees who have served you well. Bring in an experienced career professional to help people craft a solid resume that will help them get back on their feet quickly. Word of how well you have treated your people will spread both internally and throughout the community.
Whether business is up or down, there's always opportunity to begin anew. Follow this advice and this could very well be your best year ever.
©2010 Human Resource Solutions. All Rights Reserved.
Roberta Chinsky Matuson is the President of Human Resource Solutions and author of the highly-acclaimed book, Suddenly in Charge: Managing Up, Managing Down, Succeeding All Around. Sign up to receive a complimentary subsecription to Roberta's monthly newsletter, HR Matters.