Can you think of anything in your office that directly affects your revenues more than your employees?
If you hire, develop and retain employees that fit their positions and naturally produce, you will reach your revenue expectations.
On the other hand, if you are forced to constantly retrain and coach your struggling team members to be productive and inevitably rehire for the same positions, you will lose all of your revenues to costly personnel issues.
Sure, when you look at the out of pocket expenses to recruit, hire and pay the salary of an employee, it may seem minimal to the costs of new computer software, a copy machine or a long distance carrier. That is why many companies admit they actually take more time and effort in deliberating their choice of this supportive equipment than they do their candidates for positions.
The Department of Labor, the Saratoga Institute and the experts claim it cost up to one third of an annual salary to rehire for an entry level position and up to 250% of a salary to replace a salesperson or manager.
Not only do you have to be aware of the recruiting and selection expenses that rob your revenues, you must consider the following five personnel issues that devastate your bottom line. All of them are greatly affected by those you hire, develop and retain.
1. Reliability & Work Ethic
According to a USA Today article in 1998, tardiness and absenteeism cost employers $757 per employee per year. This figure does not include the cost of hiring or paying overtime to others to fill in.
The same costly outcome is true with employees who do not give a full day’s work for their full day’s pay. The greatest detriment to your revenues is the hidden costs of resentment and apathy in those required to pick up the slack.
2. Employee Theft
A recent survey of employed people showed that 35% of those polled admitted to stealing from their employer.
Other industry estimates indicate: that nearly 80% of computer crime is committed by “insiders,” employee theft and fraud average about $2,000 per employee per year from your bottom line and more than one third of all companies declaring bankruptcy last year cited that they were “stolen out of business” by they employees.
3. Failing to Reach Customer Expectations
Why would a customer who has to deal with an incompetent, rude or apathetic employee continue to do business with you? They wouldn’t and they would take their business to your competitor.
Keeping your customers satisfied is essential to building a successful, growing business. While many companies work hard to increase sales, they may overlook the importance of doing the little things that keep customers happy and buying more. It is often easier to accelerate your revenues by cultivating the customers you already have rather than having to constantly attract new customers.
4. Team Conflicts
Whether a manage battles a peer, a manager battles one of their team members or two teammates constantly bicker, the results are felt throughout the entire organization. Conflict between employees hurts communication, innovation, unity and ultimately your bottom line.
Team building is far more than putting a group of people together and hoping for the best.
5. Managers Not Upholding Standards
No position has more influence on your bottom line than management. If your managers are struggling with integrity, productivity and motivation, your entire workforce will follow.
Manager must first be effective themselves and fulfill standards and goals. If they do not, they must actively participate in leadership development.
Secondly, your managers must uphold standards for every one of their direct reports. If they let any of the five issues above infect their team, department or organization, they have allowed your employees to rob your revenues.