The 4 Things that Could Save Your Business Millions as you Grow
If you own a company, your top two priorities are constantly seeking ways to best serve your customers, and, of course, make money. Simply put; if your business isn’t profitable, you’re not going to stay in business.
Profitability can be achieved in a multitude of ways from driving new sales, increasing the lifetime value of customers, establishing strategic affiliates and referral partners, brand extensions, new products, or finding ways to reduce your bottom line.
However, many businesses and their owners are discovering a new path to increase profitability, and that is by looking inward. They are realizing that higher profitability can be achieved by not only optimizing operations but by optimizing their human capital. Recruiting, training, and, if not done correctly, the resulting lack of productivity can be massive drains on any organization’s profits. Luckily, there are many ways to enhance recruiting and training to maximize the return on these investments, as well as drive innovation, enhance productivity, and boost profits.
In this article, we will detail four strategies and methods organizations can employ to reduce costs and drive increased employee engagement through the use of innovative and progressive employment branding and non-traditional corporate marketing initiatives.
- Employment Branding as an Asset and an Investment
As organizations grow, so does the need for a workforce that is diverse, in both the traditional sense (i.e., diversity of color, gender, orientation, etc.) and in terms of skills and experience each employee brings to the table. Recruiting and evaluating these candidates is an exorbitantly time-consuming and costly task and many organizations have simply outsourced this to specialized recruiting firms. While this certainly can expedite the process and bring many qualified candidates, it can be just as costly and does not guarantee that you’ll find candidates who are a good fit.
Depending on the specialization and qualifications required, recruitment companies will charge between 15% and 25% of a candidate’s salary. This can quickly turn into a seven, eight, or nine-figure line item by the end of the year. Without a clearly defined culture that is magnetic and sticky for the right individuals, retention rates can be low and this churn can be even more costly to an organization.
Not finding the right candidate can be just as costly, The National Federation of Independent Business reports that 45% of small businesses were unable to find qualified candidates to fill job openings. Meanwhile, 60% of all employers have job openings that stay vacant for twelve weeks or longer, which costs them $800,000 annually in lost productivity and advertising fees, according to a Forbes report.
Instead, by investing in your employment brand to attract A-level talent, just as you would invest in marketing to drive sales and new customer acquisition, you can lower the overall recruiting costs because now the best talent is coming to you.
By developing a clearly defined employment brand, culture, vision, values, and community engagement model, prospective candidates are far more likely to see themselves aligned with an organization and pre-qualifying themselves as an ideal fit before ever applying to a job. This can save a large organization hundreds, if not thousands of hours in initial interviews, meetings, job fairs, and screenings.
- Onboarding and Training Time is Reduced for Employees and Supervisors
Every business is unique and complicated in their own way, even within the same industry or market segment. Intellectual property, processes, and procedures vary from company to company. It takes time for new employees to learn these unique traits. The initial onboarding and training process is key to expedite and maximize each new employee’s value and contribution to the organization. If it takes an employee six months to get up to speed and complete their assigned tasks versus three months, it is effectively a lost quarter’s worth of productivity.
Additionally, it’s not just the time to onboard and train the new employee, it’s the ongoing disruption to and lost productivity of the new employee’s supervisor. While sharing that intellectual property and processes of an organization is essential to its longevity, so is its innovation and evolution over time. Companies and technology today must be more agile and flexible. Reciprocal feedback and the ability of employees to assist in implementing and iterating company procedures can save hundreds if not thousands of man-hours. For instance, if a new retail employee is able to figure out how to fold clothes 20% faster, how much time could be saved across thousands of department stores nationwide? This applies to more technical skills within an organization, as well.
This is where the power of employment branding comes into play. Organizations that are open to employee feedback need to shout it from the rooftops. It needs to be part of how they market their overriding brand and culture.
- Engagement and Productivity Increases
Similar to our last point regarding onboarding, the practice of listening to employees allows a brand to increase workforce engagement and overall productivity. Gallup currently shows that only about one-third of employees are routinely engaged.
With clear brand values and a unified vision, every new employee is able to understand how and where they can fulfill his or her part in achieving the organization’s mission. If customer service or corporate social responsibility are key criteria to how a brand advertises itself to prospective employees, then there is a clear expectation that this employee is to for fill that in their day-to-day practices. These brand values act as boundaries by which employees act upon and are ingrained into the culture of the organization, not just written on the wall. When they are, organizations are increasing their employee engagement and productivity, leading to innovation and profits.
- IP and Employee Morale are Sustainable
What happens when a key member of a team leaves your organization without explanation? Ambiguity leads to rumors and speculation, threatening to lower employee morale and cost the organization. This is the impact that is most often felt and seen. But, what is often overlooked and hard to measure is the lost intellectual property or institutional knowledge that also departs with that individual. How much of that IP was recorded and is able to be shared with their replacement? In most instances, not much. In operations or sales, alone, how many intricacies are learned over time that don’t get passed down to their next counterpart? This not only negatively impacts sales, but can ripple through an entire organization, costing it millions of dollars. Retaining institutional knowledge and IP can save a new employee dozens of hours each month.
Unfortunately, many companies overlook the importance of creating some record of the special knowledge and experiences that each employee establishes while on the job. They only view employees as the soldiers who get things done, not as the engines of innovation and memory banks of knowledge that they truly represent. These companies see increased sales and new customer acquisition as the only and most effective way to increase profitability.
Forward-thinking organizations understand that their success is just as reliant on their employer brand as it is to their product/service brand. Employer branding drives profitability by attractive high-level talent, reducing recruiting costs, increasing productivity, and stemming the tide of costly turnover. These organizations understand that marketing efforts shouldn’t be only forward facing. How seriously will you take your ROI of your own employees?