Finance General Turnaround

It’s good business sense to show employees you care

Interestingly, despite the increase in businesses using models that rely on workers’ self-employment or zero hours contracts, we at K2 are regularly asked by businesses we are advising how they can engender loyalty among their key staff.
Assuming that employees are paid adequately, there is plenty of evidence that paying them more money is not in itself an appreciation of their loyalty or efforts.

If money is not the answer, then what is?

Christmas food hamperClearly, a business may try to use some kind of reward system to encourage employees to work even harder.
However, this will be futile where employees are already working as hard as they can, especially when their efforts may have been needed to save the business in difficult times.
Nevertheless, in an era of skills shortages, where a business has an effective, capable workforce it will want to keep those employees’ loyalty and to do this it makes sense to recognise their efforts in some way that is valued by the employee.
Christmas and the summer holiday periods are especially opportune times for showing employees some appreciation in a meaningful way.
A discretionary reward or bonus for performance can be powerful, especially at times when their expenditure may be higher than usual but the bonus need not be in cash.
A gift that recognises not only the employee but their family’s sacrifice if they have had to work longer than usual hours can work well. It could be a few hours off to allow people to prepare for Christmas or to allow a parent to attend their child’s nativity play.
How about a hamper containing seasonal treats that the family might not otherwise have and containing something appropriate for every member of the family?
Alternatively, food shopping vouchers before Christmas or a well-timed cash bonus in the cash-strapped month after Christmas, when the credit card bills begin to arrive, may be welcome, especially when many families are living pay cheque to pay cheque.
It takes a little ingenuity and thought, but showing employees that they are appreciated as individuals with other responsibilities beyond work can do wonders for their morale, their productivity and their loyalty.

Business Development & Marketing Finance General Turnaround

How do you inspire employee loyalty to your business?

respect employeesFar too many businesses rely on money to incentivise and reward employees, assuming they are motivated primarily by money.
However, there has been plenty of scientific evidence for at least 20 years that has shown that this is not the case, according to Daniel H. Pink the author of five books about business, work, and behaviour. (Washington).
The prolific contributor of articles on business and technology to publications, including the New York Times, Harvard Business Review, Fast Company, Wired, and The Sunday Telegraph, explains his argument in a popular TED talk.
Numerous tests over the years have shown that actually offering a money “prize” to groups who solve a defined problem more quickly than others is counter-productive and actually slows them down.
However, problem solving actually speeds up if there are no constraints and people are left free to think laterally.
Pink illustrates how this has been used to productive effect by a US software company that allowed employees to spend almost 50% of their time on anything they wanted, but they had to then present the outcomes to the rest of the company. Another example he cites is Google, which operates a system where engineers are free to spend 20% of their time working on anything they want. The results have accounted for up to 50% of Google’s new products.

Employee loyalty is about respect and recognition

While financial incentives might work for a clear set of simple, routine tasks with clearly defined objectives, the majority of business growth in the 21stCentury relies on innovation and conceptual ability. While obviously paying people adequately and fairly is important, what matters in the latter context is to give employees self-determination and control over their work.
It plays into their desire to do better, to use their imagination and to feel trusted.  The “reward” in this context may be the respect and recognition from management and from their peers.
Rewards or recognition do not need to be explicitly stated at the outset, but loyalty depends on being listened to, consulted, respected and recognised. The mechanisms can range from suggestion boxes to a post on a noticeboard for a particular achievement but the essential ingredient is acknowledging that people are responsible, able and adult and can be trusted to do their best without over-controlling management. Suggestions that are not acknowledged discredit management, and suggestions that are ignored or rejected without consideration make people feel undermined.
Get it right and a business will be able to rely on its employees’ loyalty, get it wrong and your staff will know you don’t really care about them.

Business Development & Marketing Finance General

Why do so many SMEs fall short when taking on new employees?

man contemplatingIn the next in our series of August business ideas to ponder at leisure we’re looking at recruitment, induction and staff loyalty.
Generally, employers hope to recruit employees who are already trained, qualified or competent for a position on the grounds that they will become productive more quickly once they start.
However, for some time there has also been complaint from employers that they find new recruits, including graduates, to be weak in basic literacy and numeracy, or people skills, and over time that they are not as loyal or committed as expected.
While recruiting experienced staff is viewed as ideal, most companies want to pay as little as possible and end up employing inexperienced staff.

Training, induction and loyalty

In our view the inexperience of staff is linked to whether or not they are valued. There are however solutions.
Firstly, why not consider taking on people who are younger and less set in their attitudes and investing in training them, not only in skills but also in the business’ ethos and work culture?
Secondly, leaving aside the skills problem for a moment, how much of the loyalty problem is due to an inadequate and often far too short induction process?  Often SMEs pay little attention to these essential underpinnings.
Perhaps they do not really value their employees, nor do they value the time and investment needed to make employees feel truly valued.
This is often characterised by a failure to induct new recruits or even to provide proper support to existing employees. All too often staff feel they are competing with colleagues rather than collaborating with them for their collective benefit.
Arguably paying attention to welcoming, training and helping newcomers to the workforce to settle in will help to make them feel valued and encourage a level of loyalty to the company that has shown an interest in their development and given them a chance.
Lastly, on the subject of loyalty, employers often complain that after they have invested money in training staff who then leave for a better opportunity.  In our view seeing this as money wasted is a too narrow viewpoint, particularly post Brexit. The goodwill generally endures.
If, as seems likely, recruitment from overseas post Brexit becomes severely limited and bureaucratic it has already been said that for the UK to be competitive it needs to upskill its workforce. The lack of home grown skills has been an issue in the UK for some time and the situation will only become more urgent, so investing in the workforce is something every business and employer should consider contributing to for everyone’s eventual benefit sooner rather than later.