Any number of factors can cause businesses to struggle. A lack of working capital. Poor planning. Ineffective management. But one factor that always affects business performance is employee engagement and the degree to which employees feel valued by their company. Your company’s profitability depends on its people — and you want your team to be composed of […]
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Any number of factors can cause businesses to struggle. A lack of working capital. Poor planning. Ineffective management.
But one factor that always affects business performance is employee engagement and the degree to which employees feel valued by their company.
Your company’s profitability depends on its people — and you want your team to be composed of the brightest and the best. In this labor market, to recruit and retain the best people you must first make your company a desirable and compelling place to work.
That means offering attractive wage and benefit packages, along with a healthy workplace culture that keeps employees engaged and productive.
Instead of seeing employees as an expense, businesses need to view them as assets that help improve the bottom line.
In my work, I have learned that there are four pillars of profitability that are critical to business success, and all four in some way impact employees. Those pillars are:
• Payroll. Employees expect the correct amount of money to arrive in their bank accounts on time and they want their information easily accessible online. That sounds basic, but businesses sometimes fail to make payroll, or they commit errors when deducting for things like taxes and benefits withholdings. Employees’ paychecks are what enables them to meet life’s responsibilities, so payroll errors and omissions are not things that can be tolerated.
• Employee benefits. If businesses don’t offer such benefits as health insurance or a retirement plan, the better employees will look elsewhere. But smaller businesses usually are at a disadvantage when compared to larger competitors. For example, in 2018, about 85 percent of employees at businesses with 100 or more employees were offered a retirement plan. In contrast, just 53 percent of workers at businesses with fewer than 100 employees had such plans, according to a U.S. Department of Labor report. The report said cost and regulatory complexities are factors discouraging small businesses from offering retirement plans.
• Risk management. Many small businesses have a certain level of risk baked into their business models. They may rely on heavy equipment, vehicles, machinery, or other factors that can potentially threaten the safety of the workplace. The question is: How effective is your risk management program? Often small businesses that have a clear exposure to employee injuries do not have any formalized risk management program in place. It’s important to prioritize and clearly communicate this risk-management program so employees know the company views their safety as paramount.
• HR compliance. A myriad of employment laws and regulations have been passed through the years and businesses need to make sure they are in compliance. The workplace is a melting pot of liability for employers. Are your hiring practices lawful? What about your compensation plan: is it discriminatory? What about terminations: do you have all the bases covered? How do you determine when an employee deserves a promotion or a raise? It’s important to have an updated employee handbook that addresses all these issues along with current job descriptions that are compliant. This makes things clearer, for both management and employees, who like to know where they stand.
To truly drive employee performance, you also need to drive employee engagement — the emotional commitment that each individual team member has to their organization and its goals. Healthy employee engagement means people truly care about their work and their company. It’s up to owners and managers to create an environment where everyone is allowed and encouraged to consistently produce their best work.
Bill Lyons, the ForbesBooks author of “We Are HR: The Business Owner’s Definitive Guide to Professional Employer Organizations,” is the CEO of Lyons HR (www.lyonshr.com), one of the largest privately held professional-employer organizations in the country.