You do not have a business unless you have products and customers. The value of your business will, however, be very reliant on the type of people employed. I always remind employees that it is the customer that pays their salary and I hasten to tell them that it is their actions which may determine the success of the business and consequently their own earnings. The right people in your business have the potential to add real value to it. Just as you work hard to keep your good customers, you need to do the same with good employees. Unfortunately, your wage bill will be one of your biggest costs, and you as the business owner must ensure that you get a return on your investment. Hiring the ‘wrong’ person will add costs to your business in many ways. Their non-committed attitude, for example, may cost you an important customer.
The most effective way to lighten this cost to your business is to employ the right people in the first place. This is one of the most difficult tasks an entrepreneur will be called upon to do. Employees should be considered the most important asset in your business. On the other hand, their negative attitude will place extra weight on your company’s ability to earn profits. I have yet to hear of any organisation that is perfect with their hiring policies. We all make mistakes in this area. Those companies that achieve superior results in this area, however, place a very high value on their employees and when hiring them, know that they, amongst other things, must embrace the company values. It is essential to know what you expect from your employees and to ensure that they understand what you expect from them. Invest in the development of your employees to keep them, but at the same time, act quickly to remove underperforming employees. Poor performing employees add weight to your business and adversely affect profitability.
I always take the view that one must look at issues from a broad perspective first and then focus on the areas which weigh down performance. We will look at some of the measurement methods covering employee productivity and cost efficiency in a later blog.
Quentin G McCullough