At Foreman & Associates, our team has seen some of the most bizarre as well as some pretty amazing things in our line of work. As observers looking inside of other companies, we have noticed that organizations of every size need to stay focused on taking care of their stakeholders and making sure that every team member is committed to reaching the company’s mission.
We have also come to the conclusion that there are a lot of business leaders who need to seriously consider realigning not only the management (operations, policies, and processes) of their companies but realigning their managers.
When the company itself is obsessed with profits and managers are obsessed with processes, one huge variable gets left out–which will cost the company both profits and failed processes–that huge variable is their people.
When the people get left out of the master plan, the plan ultimately falls apart and the business is either acquired whole, sold out like parcels of land, or dissolved. We’ve also seen instances where board of directors give the ole’ heave ho to senior leadership and they bring in fresh ‘meat’ to salvage and rebuild the company.
Your Largest Expense is Your Greatest Asset
In highly automated production companies, labor costs are relatively low. In labor-intensive industries like hospitality, your costs can be between 20 to 40 percent. However, in many industries, roughly 40 to 60 percent of a company’s earnings is reinvested in their people, through payroll and benefit programs. Yet, many companies fail to provide the solid infrastructure that supports their company’s largest investment.
Many of us ooh and aah over some of the Silicon Valley tech companies that splurge heavily on their employees, landing them on the “Top Companies to Work For” lists. They have flexible work hours, flexible work options like telecommuting and homeshoring, and seem to just be well…more flexible than most companies. They seemingly put their people first, or at least know that if you’re going to work them hard you might as well create an environment where they can thrive, create, and be innovative. Who cares where and when they work, as long as they get the work done, right?
Then of course there’s also a large number of people who roll their eyes at these same companies, thinking that either it’s a waste of money, or they think that their own organization couldn’t afford to invest in their team the same way (or in a similar fashion).
This article is for the eye rollers…
Turnover and Theft is More Telling Than You Think
Be honest with yourself. Your company has high turnover doesn’t it? It may not have always been that way, but if you looked closely at the numbers, you would see a spike or two would’t you? Do you know why?
Why are employees calling out sick more often? Why do they keep clocking in late? Why are they not returning from FMLA leaves? Why are they just jumping ship and quitting with little or no notice?
Most likely because your employees are stressed out and feel like their job is the last place they want to be.
Many may even feel devalued, disconnected and not a true member of your so-called “family”. Maybe they have grown disillusioned and care less and less about your company’s mission because they’re too focused on their own.
Why is their productivity dropping or stagnant? It could be personal matters weighing on them. It could also be the work environment they are being subjected to each day. Are they micromanaged? Is it a hostile workplace? Are they lacking the resources they need to complete their work? Has internal competition made a turn towards the ugly road?
If you look even closer you could see another category (and possibly even sub-categories) on that spreadsheet that would reflect how much money your company loses to employees who tiptoe away with office equipment, supplies, money, and even customers.
The one thing that is hard to accurately track is the theft of time.
Imagine how many of your employees are enjoying their paychecks each pay period, yet they didn’t actually work the expected or agreed upon hours during that period. They clocked in and out during their scheduled times, but how many hours were spent not working?
Imagine how many sit idly by on their smart phones, tablets, and even your company-issued computers—doing everything but the work you’re paying them to do. Imagine how many are using company time and resources to apply to other organizations. Imagine that sick time you’re paying for being used by your employees to interview with their perspective new employers.
Why do you think your employees are stealing time and other resources from your company?
Most likely for the exact same reason why your turnover is so high. There’s a disconnect. They are disengaged. They increasingly don’t seem to care much about your company or the role they play in it anymore.
Who’s to blame for this disconnect? Plain and simple… Management.
Management sets the tone and creates either a nurturing or suffocating environment.
The culture of your company starts with the CEO/President, or whatever fancy title that they possess that says clearly, “I’m the boss…I’m the head person in charge…I’m the one who signs your paycheck….” That person is your top manager. So if the culture is skittish, it’s because of the head of the company. If the culture of the company is bullish, yep, it’s because of the head. If the culture of the company is cutthroat, dog-eat-dog, every-person-for-themselves…that’s because the head of the company created and nurtured that type of environment. When the boss says, “we’re quick to hire and quick to fire” that person has created a toxic environment and the culture is embedded with backstabbing and the kind and gracious people always get trampled on (because they are seen as weak).
So when employees feel devalued, used and abused, as though they are just an employee ID number, or easily replaceable, guess what they do? They behave and act accordingly. They then start to use and abuse your company.
Structure and Communication
The employee-employer relationship is similar to a marriage. It’s based on some constructive friction. Iron sharpening iron. It takes awhile to get to know each other, and to get into the ebb and flow of the type of relationship and environment that you would like to have. You have to learn how to communicate with each other and the quirks that make you both uniquely you. If you create a dictatorship then you will most definitely have high turnover, back-stabbing, and plenty of theft on various levels. If you create too much of a democracy, you will find the boss working more than the employees because he/she has to pick up the slack…because everyone knows that he/she will.
There’s a healthy middle ground, where authority is established but not shoved down anyone’s throat (figuratively speaking) and where work and processes are divided and executed with a team focus. Your company shouldn’t feel like a sweatshop nor should it look like you’re herding sheep, or worse, cats.
In our next post we will provide some insight on how to begin the realignment process within your company.
Copyright 2016. All rights reserved. Foreman & Associates, LLC.