eBusiness Blog

Is Employee Turnover Costs Robbing Your Profit?

The key to reducing high turnover and its associated crippling costs

Employee Turnover Costs Robbing Your Profit

In this case size (business size, that is) doesn’t matter. High turnover costs are a significant problem for all businesses. However very few discuss the true extended costs and the multiple ways that it impacts the business.

Would it surprise you to know that it can take anywhere from six to nine months wages to replace and train a new replacement?

I’ve calculated some exact stats. Let’s take a minimum wage employee who leaves the company, sometimes without notice. Not only will productivity get a hit, but also some of the emotional effects. They include shock, frustration, and stress not only for the hiring manager, but also for those employees who have to take on more responsibilities, and grieving the loss of a colleague and friend.

Let’s assume the hiring manager is earning $90,000 a year (roughly, $43.00 per hour). It will take hours from their work day to finish the exit paperwork, release an ad to find another candidate, review applications, interview and select a new recruit.

Then, there is onboarding and training to get the person to the same level as the latest employee. In simple terms, the total of separation costs, hiring and pre-employment costs, and training costs will be $5,300.00 to replace a minimum wage employee.

Losing a Millennial employee can cost the company $15,000 to $25,000 but it’s actually a lot more when you weigh in a few additional variables mentioned earlier.

Other research shows that turnover costs can add up to 213% of the salary for a highly trained position! So if a highly trained executive is making $120,000 a year, the true loss could be up to $255,600 to the company!

The key to reducing high turnover and its associated crippling costs is to take time… much more time… to choose your new hire than ever before.

The hiring and training processes have changed and it still surprises me that businesses, of all sizes, often spend very little time to find their next candidate.

Why? The onboarding process takes time and most managers are run ragged and can’t prioritize the appropriate time for choosing the best talent.

Glancing at an application or resume and saying, “When can you begin?” no longer serves you.

In fact, all employees, especially the Millennials, want to feel they will be engaged, valued, challenged, and well trained. They will require continuous learning opportunities. Mentoring is one of the most effective, cost efficient ways of increasing employee longevity benefiting the mentor, the mentee and driving significant retention.

Your business relies on the talent you hire.

Carve out the time to have a conversation with your employees to see how they are doing, what challenges they are facing and how you can support them.

This is just the beginning of hiring and retaining your best people. But now, you’ve been reminded of the consequences of hiring on the spot or not taking the steps to value and prepare your hires for a great job with you!

About the Author, JoAnne Marlow, B. Comm., B. Ed., MA Leadership Principal

JoAnne Marlow

JoAnne Marlow is a leading authority, best selling author, and thought-leader in multi-generational communication and management systems. She offers CEOs and their managers the information and guidance they need to optimize their cross-generational employees' strengths and productivity to access their potential and achieve outstanding results.

Her latest book is available on Amazon: "25 Powerful Strategies to Hire and Successfully Retain Millennials".


What Business Owners Need to Know When Hiring Millennials

For today’s eTip I spoke with the author of the book 25 Powerful Strategies to Hire and Successfully Retain Millennials, JoAnne E. Marlow!

 

What is the difference in hiring millennials?

JoAnne sees a big change in the work place environment and as times have changed expectations at work have changed.

Years ago after the release of the book Boom Bust & Echo JoAnne began to see a noticeable difference in the work ethic demonstrated by her existing peers and employees vs. the younger generations.

Not everyone is the same but we do place age groups into categories and look for consistencies within those categories.

The people in those categories vary greatly with some not being as active or tech savvy as others. It depends on the person but know that you need to be careful when hiring on your new employee.

Set expectations up front

Be clear in your job description when it comes to millennials. Make sure the culture and job expectations are defined beforehand so you don’t run into any surprises.

Millennials may be resistant to recognizing an implied hierarchy so make sure they know what you and your company are like before you bring them on as an employee.

Educated and skilled workers may be less inclined to take on tasks like data entry or sweeping floors so if that is part of the expectation for a job it should be stated as such in the ad description.

Convey the kind of personality you want in your ad. The clearer you are as an employer about what you need in the office the better.

State what kind of advancement opportunities exist and when the new employee can expect to move up the ladder.

Some people might expect a raise after 3 months, some after a year.

The typical time you can expect them to stay with your company is about 18 months. If you keep a millennial for more than 2 years you’re doing something right!

Be prepared and ask a lot of questions. Don’t dive in right away and hire them on the spot. Be careful and mindful so you hire the right employee.

If you find yourself losing control and are rude or vocal with them, some will likely leave right away and not come back. Everyone can have a bad day but some new employees may not be thick-skinned enough to tolerate some behaviour.

Be clear about expectations. And know that some may take advantage of an employer’s generosity.

Provide a guide

Draft a policy handbook in relation to dress code, vacation time, etc. so they know beforehand what rules they must adhere to.

JoAnne’s most recent book 25 Powerful Strategies to Hire and Successfully Retain Millennials details how to deal with this generation and how to demonstrate the emotional intelligence to entice them to work hard and help your business. JoAnne is an expert in bridging gaps between generations.

In her book she has explained 25 different ways to hire the right new people from the millennial generation so you find and keep the best people.

She advises that the young person you hire isn’t going to change so it’s also important to make sure existing employees are fully informed about your new hire and how you’ve prepared for them.

For those of you who want to get in touch with JoAnne directly she can be reached through her website at: www.SystemsForEngagingTeams.com

Also please feel free to share you own stories about your experience in hiring on those between the ages of 19 and 36 in the comments below and if you’re struggling with your new hires try reading JoAnne’s new book!

You can pick up JoAnne’s book online from either of these two links:

Canada – Amazon.ca: http://amzn.to/2gfzYL6

US – Amazon.com: http://amzn.to/2wzGe6S

Until next time,
Susan Friesen

Social Blast for Entrepreneurs

What If You Could Learn Social Media and Online Marketing Each Month With Ease?

If you are new to Social Media and online marketing or find it overwhelming and confusing, my monthly group coaching program, Social Blast: eMarketing for Entrepreneurs is a perfect way for you to incrementally learn the best strategies and tactics to help you grow your business online.

  • Uncover what it takes to execute a successful, revenue-driving social media strategy
  • Learn how to build relationships, trust, and brand awareness with your ideal customer
  • Discover actionable strategies to engage followers online
  • Master creating compelling content that’s always on target
  • Discern how to authentically differentiate your brand in a crowded marketplace
  • Find out the best times to post for higher readership
  • Stay abreast with the latest prospecting techniques to grow your list, groups and more…
  • Learn ways to engage through social media monitoring and listening

It’s a monthly group coaching program for those just starting out or wanting more advanced strategies to help with their online marketing and social media efforts.

› CLICK HERE FOR DETAILS

About the Author, Susan Friesen

10 Critical Questions You Must Ask to Get Maximum ResultsSusan Friesen is the founder of eVision Media, a boutique web development and Digital Marketing firm of over 15 years that specializes in designing, building and marketing professional, unique websites for entrepreneurs, businesses and organizations.

Visit www.ultimatewebsiteguide.ca and grab your FREE "Ultimate Guide to Improving Your Website's Profitability - 10 Critical Questions You Must Ask to Get Maximum Results".

Easy Project Management Tips for Entrepreneurs Who Want to Get It Done Right, Right Now

Easy Project Management Tips for Entrepreneurs Who Want to Get It Done Right, Right Now

Using these project management concepts will increase your chances of success

Entrepreneurs, by their very nature, are big thinkers with big plans who want to make a big impact in the world. As an entrepreneur / small business owner, I get it – I do too. I also understand how many distractions there can be vying for your time every day.

After a long career with large corporations and earning my Six Sigma Green Belt, I realized that many of the things that worked well for me work equally as well in small businesses. 

Investing the time upfront to prepare your project plan and get everyone onboard is time well-spent.Click To Tweet

Project management is one of those critical skills that I believe every business owner should learn to do well.  I know how many distractions come up that could easily derail your goals if you don’t focus on doing the important things first.

Let me explain how you can utilize this skill to grow your business.

  1. Decide on your next big project goal

    Write down the name of the project and create a charter. The charter describes briefly what results you expect to accomplish.
     
    One of the many advantages of preparing a charter is that it forces you to clearly articulate what you really want. Once you know what your goal is, plan the steps to get there rather than just “winging” it and hoping for the best.

    For instance, is your project designed to:

    • Save money?
    • Increase sales?
    • Increase the number of email addresses you have in your management software?
    • Get more speaking gigs?
    • Write a book?
    • Increase the number of high-paying clients?
    • Create a new group or online program?
  2. Identify the scope of this project

    Keep the project small, focused and manageable. If it’s too big, chances of success are lower because there are so many moving parts that might compete for your time or resources. When you write your scope, list what you will do — and what you will not do.
     
    For instance, if you are working on increasing your visibility to your target audience you might consider a project around Facebook or LinkedIn. I recommend that you pick just one of them and knock it out of the park. In this case, if you picked Facebook, then state that this project does not include LinkedIn.
     
    Then you can do a separate project to work on LinkedIn with its own timeline and deliverables when you are ready.

  3. Define your baseline and your goal

    This will help you know where you are today and where you plan to be upon completion of this project. For instance, say you want to increase the number of people whom you can send marketing emails to.  
    You need to know the number of contacts today as well as the number you want to have at the end of the project. If it’s annual sales, then it’s easy to look at the past 12 months to get your actual sales. Then just set your goal as a dollar or percentage above the baseline.

  4. List each major step of the project.

    Include the name of the person responsible for completing each major step, and when each step will be accomplished.
     
    Oftentimes, one person cannot complete their step until someone else finishes theirs, so it’s important to understand the interdependencies.

  5. Determine the start and completion dates.

    Once you will have the start and completion dates, you will be able to identify milestones along the way.
     
    This will help you stay on track and accomplish your goal without a lot of stress, wasted time or forgotten steps.

  6. Prepare a budget

    The budget will define how much you will spend to accomplish the goal and when the money needs to be available. Your project may be designed to save money, such as taking on the marketing of your program yourself or changing vendors.
     
    In this case you would list when the savings will start showing up and how much more you will have in your bank account at the end of the project.

  7. Make a list of resources

    These are the resources you will need to accomplish the project. Are you going to do everything yourself or will you have a virtual assistant?
     
    Will you hire someone to prepare marketing materials, or to create your website, Facebook posts or a LinkedIn profile?

  8. Communicate clearly to everyone involved in the project

    And by clear, I mean precise, with no room for guessing or individual interpretations about what others think you want. Draw pictures, share examples and learn to speak their language if you are talking to technical people.
     
    Once you know who’s on your team, make sure they have an opportunity to provide input. One of them could hold that one big idea that will take your project from good to great.
     
    Have a brainstorming meeting – it’s is a great way to get everyone’s ideas and come up with a plan better than you could ever do on your own. After all, that’s why you invited the best & brightest to join your team in the first place, right?
     
    This process also guarantees that you have buy-in on the project and that everyone knows the objectives and their role in accomplishing them.

  9. Set up regularly scheduled meetings on your calendar

    This schedule will help you review progress, clear up any confusion, remove any barriers and provide direction.
     
    There is nothing worse than getting close to your project completion deadline only to realize that what you are getting is not at all what you expected! Especially if it all could have been avoided if you had set up the time to check in on the progress. Inspect what you expect!

  10. Set up team ground rules

    The ground rules can include frequency/length of meetings, notifying you in advance if they are going to miss the meeting, how conflicts will be handled and agreement by all that they will show up to the meetings prepared with their deliverables or notifying you well in advance if they are at risk of missing any critical milestones.

  11. Sign your charter

    I know – this might sound cheesy. But it really isn’t. This is a commitment you are making to yourself and the simple act of dating it, signing it and putting it up on your wall where it is literally in front of you all the time will make it much more likely that you will follow through and reap the benefits.

  12. Celebrate your wins along the way

    This doesn’t have to be at a high cost – it can be a simple “Thank You” card to one of your resources who delivers on schedule or a group dinner or pizza or a Starbucks gift card.
     
    A little goes a long way in motivating yourself and those on your team when appreciation is shown.

Your chances of reaching and most likely hitting it out of the park increase dramatically. And remember, the best way to eat an elephant is one bite at a time.

About the Author, Katherine Hartvickson

Kathryn Wilking

Katherine Hartvickson is the founder and president of Hartvickson & Associates, Inc. dba Quantum Ascendance. She is an experienced business consultant and success coach. Since leaving the corporate world in 2009, her clients include business owners and other seriously committed professionals and entrepreneurs who want to gain the confidence and skills to break through the barriers of success and achieve their ideal life.

What separates her service from others is her experience in leading large teams and developing top performers in corporate environments and because of this, clients achieve individual & financial rewards and the recognition they earned without sacrificing their personal life. If you are interested in knowing more, she can be reached at www.QuantumAscendance.com.


Team Building Tips to Help Grow Your Business

We’ve talked a lot about things this summer like video marketing and using Twitter to grow your business. Today I’m going to talk about the importance of using a team to build your business.

 

Build your business right by hiring the right people

Many years ago I was a one woman operation. I did it all.

The designing, the programming, the marketing; I was taking everything on myself.

At a certain moment I realized in order to build my company while providing my clients with what they needed, I would need to expand and start adding on some team members.

There are many different kinds of employees you can hire. Some may be temporary or freelance talent, some could be outsourced, or you can even hire on student interns from local schools to help. It doesn’t always have to be a full-time salaried employee.

The important thing is to focus on what you excel at and hire on people to help offset your weaknesses.

Hire an Expert

My biggest weakness was my understanding of how web technology had evolved. It had changed so quickly that my own skills had become a little dated even though they were only a few years old!

My first hire was a programming ace from a local university and he and I got to work. Once I saw his talents, I started delegating more and more of the tech work to him.

I let him work and I listened and learned. Together we really took eVision Media to the next level.

So hire yourself an expert even if it’s one in something you feel you’ve mastered. You might be surprised at how much else there is for you to learn.

Hire a Money Maker

You also want to hire someone who is profitable for you. Hire someone who makes you money!

Yes it’s nice to have help with your own tasks in the same way it’s nice to have a cleaning lady but look for people whose skills and background will make you money so you can pay their wages.

This is especially good advice if you’re struggling to stay ahead. Hire a sales rep, a product engineer, or some other type of employee where the financial return is immediate.

The more money-makers you have the better your business is going to be.

And make sure you are comfortable delegating the responsibilities too!

Lead by Example and Learn from the Feedback

Set standards for the employees to adhere to when delegating the work. You know how you prefer it done so write that out clearly and because the employees will bring their own knowledge to the project you may find, as I have, they often exceed those standards.

I myself have a team of designers, programmers, SEO experts, and more and I have to trust their expertise when assigning duties. Hiring experts is great and when you are comfortable they know what they’ve claimed to know you’ll be in a position to trust their expertise more, which takes pressure off of you.

Don’t Try to be an Expert in all Things

You can’t possibly hope to know everything about running a business – whether it the legal work, the bookkeeping, or any of the other many essential elements of running a business, and know everything about your internal roles and industry as well.

Take for example marketing. You can spend tens of thousands of dollars on marketing courses trying to being an expert in marketing yourself but while you’re doing that you aren’t focusing on all the other elements of your business.

Using the same money to pay someone to market your business while you focus on other aspects of it like cultivating leads or working with clients to make sure they’re happy makes much more sense and will help you grow your business instead of just your personal skill set.

It’s far too difficult to grow your business without building a team.Click To Tweet

I wouldn’t start self-funding multiple courses on contract law if I needed a lawyer, I would hire a TJ Smith lawyer, so why would you attempt to become a marketing expert when you need marketing?

This rings true for bookkeeping as well. My time is simply better spent running my business than trying to become an expert in all areas of the business. Hiring a bookkeeper makes more sense financially and professionally since I then have someone with experience in the role as well.

It’s far too difficult to grow your business without building a team. When you plan your business (and you should) and invest in your business include what you need experts for and budget for hiring professionals to help you grow.

If your business is really a supplemental income and you’re not full time then this may not be your approach but if you’re serious about growing your business into a solid company then you will need a team to help you.

Hire My Team

The take away is of course that you need to hire the right people to help you grow. If your business requires website development, branding, logo design, online marketing, social media management, or something else related to digital marketing and the online presence of your business then get in touch.

My team that I have cultivated myself are great so feel free to get in touch if you find yourself overwhelmed and need help with any of the services we provide. I don’t work with just anyone since experience has taught me to consider who I hire carefully. My team deliver and we do it with smiles on our faces that translate into smiles from our clients.

Check out our website at www.evisionmedia.ca for more and by all means if you have questions or comments post them to any of our social media channels or contact us directly via our website!

Until next time,
Susan Friesen

P.S. If you found this article helpful, please share it with your Twitter followers:

Team Building Tips to Help Grow Your BusinessClick To Tweet

About the Author, Susan Friesen

10 Critical Questions You Must Ask to Get Maximum ResultsSusan Friesen is the founder of eVision Media, a boutique web development and Digital Marketing firm of over 15 years that specializes in designing, building and marketing professional, unique websites for entrepreneurs, businesses and organizations.

Visit www.ultimatewebsiteguide.ca and grab your FREE "Ultimate Guide to Improving Your Website's Profitability - 10 Critical Questions You Must Ask to Get Maximum Results".

The Pros and Cons of Hiring Employees Vs. Independent Contractors

What all business owners must consider before deciding which to hire

The Pros and Cons of Hiring Employees Vs. Independent Contractors

As your small business grows, you’ve concluded it’s all too much to handle by yourself – right? Or, you already have employees and are ready to expand your team so you can scale your business to the next level.

Now you need to explore the pluses and minuses of each type of helper and determine which is the best fit for you.

In this article, I share some of the pros and cons of hiring employees and independent contractors to help you make the ideal choice for your business.

In the US, the Internal Revenue Service (IRS) has very strict guidelines you need to familiarize yourself with as a precursor to making any hiring decision.

In addition to the IRS, there are a number of other state and federal agencies that will audit your business if it looks to them as if you might have misclassified employees as independent contractors.

First, let’s explore some of the pros and cons between employees and contractors:

Pros and Cons of Hiring Employees

Pros:

  1. You have significantly more management control over what, how & when the work gets done.
  2. Employees generally feel more part of the team and will go above & beyond to do a great job.
  3. Turnover is lower when employees enjoy more job security – so teamwork, quality, efficiency and customer service tends to be higher.
  4. Employees complete an application for employment, certifying all the information is accurate and giving you permission to conduct background checks and drug tests.
  5. If they get hurt on the job, they are covered by your workers’ compensation insurance so you avoid expensive medical and compensation costs.
  6. All the work performed is the property of the business owner, even creative work subject to copyrights and patents.
  7. It’s easier to put together a recruiting process to weed out potential bad hires so you can hire the best employees that fit well with the culture you are creating.
  8. You can delegate tasks to them so you can focus on doing what you are best at and enjoy the most.
  9. They are your own brand ambassadors and serve as your best marketers.

Cons:

  1. You need to provide employees with a space, equipment and supplies to conduct their work.
  2. You need an employee handbook so they understand your company rules, benefits and procedures. You can also use it to manage your team.
  3. If business slows down periodically, you are still paying for the person to come to work even when there isn’t enough to do to make it worth the cost.
  4. Employees can file legal claims against you for a variety of reasons such as employment discrimination, unfair pay practices and wrongful termination.
  5. If you decide to layoff an employee due to a lack of work, you’ve lost the training investment you’ve already made and will need to incur recruiting and training costs to hire a replacement if they aren’t available or interested when work picks up again.
  6. Firing team members can have a negative impact on employee morale of remaining staff if they think you were unfair or if they now must carry the extra workload.
  7. You are responsible for collecting taxes from the employees’ paycheck and paying your share of their Social Security and Medicare taxes.
  8. You must track all hours worked and pay time and one-half for employees who qualify for overtime pay. Federal law requires overtime pay after 40 hours per week but check with your state/province on any overtime pay that’s also calculated after 8 hours per day.
  9. In most states/provinces, you must pay unemployment and workers’ compensation insurance.
  10. Over time, employees will expect to receive pay increases along with some benefits like vacation and paid time off for personal business / sick pay.

Pros and Cons of Hiring Independent Contractors. A.k.a. Consultants, Freelancers & Virtual Assistants

The IRS defines an independent contractor as an individual who the business owner and/or their designee has the right to control or direct only the result of the work and not what will be done or how it will be done.

An example of this would be a copywriter that has her own business and works with multiple business owners to write their marketing materials.

Or those that provide services such as bookkeeping, human resources, safety administration, computer support or project management on an as-needed basis.

Pros:

  1. Typically, IC’s enjoy a higher rate of pay than employees since there are no additional costs.
  2. Most IC’s are experts in their field and can quickly get up-to-speed on your needs, so it’s more efficient to hire them if their expertise is not needed full-time.
  3. Depending on the language in your IC agreement, it’s easy to let an IC go once a project is finished or you no longer need or want their services.
  4. IC’s stay up on the latest technology, regulations and licensing requirements and bear any costs to do so.
  5. By creating a Scope of Work agreement, both you and the contractor agree on the working relationship details.

Cons:

  1. You have less control over the work of an IC because although they work on due dates, they independently determine how best to get the work done.
  2. They tend to work remotely so face-time is limited and it’s a little harder to develop a relationship like you do when with employees you see every day.
  3. When an IC finishes an assignment, they might not be available the next time you need them. Or if it is a rush job, they might charge higher prices to move to the front of the line.
  4. If an IC is injured on the job, they can sue you for damages because they are not covered under your workers’ compensation insurance plan.
  5. Federal governing agencies watch small businesses very closely. It is to the government’s benefit when an employer collects taxes from employees and pays the company portion of the required taxes because those taxes support the government’s operating budget. Otherwise, IC’s often under-report their earnings and fail to pay both the employee and employer taxes.
  6. If they work exclusively for you full time, there’s a good chance they are an “employee” rather than an IC – and you are legally required to treat them accordingly.
  7. They are less likely to serve as a brand ambassador for you – it’s their brand they will promote – not yours.

There is a place for both employees and independent contractors in running small businesses. It really depends on what you need and how much control you want.

Mistakes in mis-classifying employees as independent contractors is very expensive, subjecting you to fines and back pay for current and past employees. If an audit determines that you knew, or should have known, that you were paying employees as independent contractors, in addition to stiff penalties you will have to go back for 3 years and correct the mistakes.

If you are unsure if you are needing to classify your workers as employees or independent contractors, contact an HR professional to give you the advice you need.

About the Author, Katherine Hartvickson

Kathryn Wilking

Katherine Hartvickson is the founder and president of Hartvickson & Associates, Inc. dba Quantum Ascendance. She is an experienced business consultant and success coach. Since leaving the corporate world in 2009, her clients include business owners and other seriously committed professionals and entrepreneurs who want to gain the confidence and skills to break through the barriers of success and achieve their ideal life.

What separates her service from others is her experience in leading large teams and developing top performers in corporate environments and because of this, clients achieve individual & financial rewards and the recognition they earned without sacrificing their personal life. If you are interested in knowing more, she can be reached at www.QuantumAscendance.com.