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5 Small-Business Employee Practices Guaranteed to Grow Your Bottom Line
It may be unusual to hear the word “guarantee” when it comes to financially sound employee practices – particularly in small businesses in which the workplaces are typically highly tailored to the owner or leader’s management style and the marketplace in which the company competes.
Yet, based on the organizational development research my organization, Winning Workplaces, has done since 2003 via our national small workplace award, there is such a thing as a set of practices for which investment in them, if fully endorsed and nurtured by leadership and given the time to take hold in the firm, can dramatically increase your top line revenue and bottom line profitability.
Below are five such practices, along with the results they’ve yielded for several 2010 applicants for our Top Small Company Workplaces award. Use these as is, or as templates to improve the existing workplace culture practices of your organization.
Use core values to best manage employees and customers. The most popular core value at a California-based advertising firm founded in 2002 is “100% Jerk Free Environment.” The company reports it has been a powerful tool in maintaining their culture, stability and profitability. In one recent circumstance, their executive team made the decision to stop working with a client whose account made up a significant portion of their revenue because they felt they were violating their “Jerk Free” value. While painful in the short term because of lost revenue, the firm calculated a net gain in the long term because they were able to retain four key employees whom they sensed would have left if they had continued this particular client relationship.
Ask your employees to answer, on a weekly basis, questions that directly influence how your company should proceed. A Maryland-based health and wellness services provider uses questions like: How did I improve myself and add value to my client, my team, and the company? How did I deliver more value to our client base? How did I increase sales while keeping quality consistent? How did I reduce operating expenses by utilizing technology? How did I become more effective personally? Amidst a saturated market, this firm, founded in 2005, linked this practice with outstanding growth of 2000% through 2009.
Give your employees, at all levels, the autonomy to help design your people practices. At a Massachusetts-based consulting business founded in 1994, leadership tasks employees with forming committees to redefine the benefits structure, and administers employee surveys twice a year to gauge effectiveness of current benefits. Leadership claims this practice helped reduced turnover – which is especially costly to small firms – from 40% in the late 1990s to the low single digits in recent years.
Embrace “fast failure.” This means giving employees the freedom to make mistakes, admit them quickly, be proactive in correcting them, and allowing everyone move on. This practice has enabled a Pennsylvania-based Internet and data processing services provider founded in 1981 to refine their development process in an iterative manner across all functional teams. As a result, their project profitability has increased an average of 20% for each of the past two years.
Use technology to remove the “gray areas” of each employee’s role. If you run a small business, you no doubt know how powerful technology can be when it comes to functions like marketing to help level the playing field with big competitors. Technology can do the same for your internal employee processes. At a Michigan-based law firm, founded in 1989, their staff input data into a “hot-doc” system that produces documents quickly and efficiently, greatly reducing human error. As the firm implemented this program they saw a direct decrease in payroll costs, as they reduced data-entry time, and, in turn, increased work volume.
Mark Harbeke is Director of Content Development for Winning Workplaces, a nonprofit based near Chicago whose mission is to help small and midsized businesses create better work environments. In addition to writing content for their website and newsletter, he serves as technology advisor for the online application for Winning Workplaces and Inc. Magazine‘s annual Top Small Company Workplaces award.