by Michael Watkins, MBA/JD, EBITDA Growth Systems
Let us open with something that we are all experiencing and therefore can agree upon – it is easier to get a new client than it is to find a good employee!
The “war for talent” has been waging for a few years but this post-COVID economy has increased the intensity of the battle ten-fold. At EGS, we have dozens of clients and each one of them are being constrained, from a revenue generation stand-point, because they cannot find the workforce necessary to meet growing customer demands.
As profitability experts, we encourage small to medium-sized business (SMB) owners to focus on developing and executing plans in five core areas – Sales, Marketing, Finance, Operations and Management. Most SMB owners are familiar with the first four and immediately understand how they will contribute to their success. The response that we get with regards to Management, however, is interesting. Many SMBs treat their employees like they are a dime a dozen. They do not value their employees, so they do not value the development and execution of a Management plan that is designed to “tend to the caring and feeding” of those employees. What a huge mistake to make in today’s tight labor markets.
The largest part of a business owner’s brain should be focused on their people.
Machines don’t make parts, your people do. If you don’t have people, then you can’t make parts. You can’t generate revenues and profits if you can’t make parts. Obviously if you don’t have people, you are going to have to find them. And here is a hint – if they are good, they are already working for someone. Accordingly, if you have good people working for you, then you need to work hard to retain them.
There is so much involved in the development and execution of a Management plan that will substantially increase your employee retention, but the three most important ingredients will get you 80% of the way there –
1) You must value your people.
You can’t just give lip service to valuing your people. Your workforce will see right through it. You have to actually value them. Where you invest your time and resources within your company speaks volumes.
2) You have to train your Managers.
Typically, this means starting with you!
The Gallup Organization report that only 14% of people are naturally good at managing others. That means that 86% of people are not good at managing others. We should all assume that we are in the 86%!
3) Implement recognition and reward systems.
Paying your employees a competitive wage is simply the price of admission. If you are not doing that, then you do not stand a chance in this tight labor market.
Implementing a recognition and reward system takes your company to the next level. Implementing a recognition and reward systems communicates to your employees what “good” looks like in your company. Implementing a recognition and reward system makes key initiative like GEMBA and 5S stick. Implementing a recognition and reward system increases efficiency, productivity, and profitability.
If it is easier to get a new client than it is to find a good employee, then it is time for us to start playing good “offense” and commit to investing in focused recruiting and creative onboarding. It is also time for us to start playing good “defense” and commit to retaining our existing employees. Our long-term success is dependent upon it.