Friday, July 31, 2009
Entrepreneurial companies are tough places to work. What's stopping staff from leaving your firm?
Finding the right answers could make the difference between achieving greatness and being profiled in More Lessons From the Edge, because the cost of staff turnover is disproportionately higher in smaller firms. If someone leaves a big company, management can transfer in an underused employee from another division or arrange for job sharing until a replacement is found. You don't have that luxury. The result is a loss of productivity and, potentially, of business opportunities — not to mention the expense of hiring and training the replacement. Once you have good people on board, it's much cheaper to keep them.
Once you've landed an employee, your job becomes retention. The most significant employment advantage of an entrepreneurial company is just that — its entrepreneurial culture. Play to your strengths. Create and maintain an environment that has the following characteristics:
Open communication: Start with communicating your vision and values, which, if you are doing a good job, everyone in the organization should be saying in their sleep. When your vision and values become a mantra, your company can use that mantra as a touchstone for all the decisions that are made. An open environment also means providing reinforcement and other forms of feedback to your employees. The flipside: adopt an open-door policy in which no idea is considered stupid. You can also offer rewards for ideas that are implemented in order to encourage a constant flow of creative juices.
While it sounds counterintuitive to private firms, I believe all companies should practise open-book management. When employees understand the finances of a firm and can see the impact of their work on the bottom line, they are far more likely to buy into your vision.
Respect and trust: Show that you respect and trust your employees by standing back and letting them do their thing. If you sense they need assistance, then be a coach rather than a micromanager. As long as they deliver results, let them come and go as they please. After all, growing companies demand flexibility from their workforce; you should be willing to pay it back. Allowing employees to achieve more balance in their lives through flexible schedules, job sharing, telecommuting and reduced summer hours can make that shiny office tower across the street look like the Death Star.
Continuous learning: Employees who can develop new skills through formal education and on-the-job training tend to be more loyal and, of course, more effective.
Lots of fun: A casual, enjoyable environment goes a long way to building employee loyalty. Create bonding experiences for your team through regular group activities, whether they're educational or just for fun.
Results-based compensation: Build compensation packages that are transparent, consistent and fair across the organization. They should include a modest base salary with plenty of opportunity for upside through commissions, profit-sharing and equity. This will align your employees' interests with the goals of the company. By offering equity, they will truly feel like your partners. Just be sure to impose mid- to long-term vesting periods so that the employee must stay with the company for a fixed period of time before they can cash in.
Celebrations: Recognition is very important to people. Although something as simple as an Employee of the Month trophy can be motivating, I suggest you try to be more creative. I have seen one company provide the best parking spot and the use of a top-of-the-line Mercedes to its best-performing salesperson each month. It is also important to celebrate as a company. Since you've opened your books, everyone will know when you exceed your targets. Make a big deal about it. Have a party. Do something big that will be a constant reminder to your team of their success and the part that they all played in it. Heck — why not ride in on an elephant?
Your most important assets walk out the door every night. To make sure they come back the next morning, give your people your time and full attention. Need a mantra to help you achieve this? How about this one: "The most important customer is my employee."
Sunday, July 5, 2009
With over 70% of the economic experts expecting a last quarter uptick in the economy, now is the perfect time to start preparing for the extra business. I am a big fan of using virtual assistants to help build out my team during peak seasons. This is an especially useful business strategy in today’s market place. One of the best lessons a recession can teach us is that in many circumstances variable costs beat fixed costs any day. To survive the feast or famine rollercoaster of entrepreneurship, you need to make sure your expenses mimic those same ups and downs.
Benefits of Virtual Assistants
Adding virtual assistants to your workforce is a terrific way to turn a traditionally “fixed” expense, like payroll, into a more cash flow friendly variable expense. Let me explain how it would work. For example, most business advisers suggest that payroll expenses should average 20-30% of your sales. This would mean that when sales are flush at $250,000/month that translates into payroll expenses of $50-75,000. When sales hit a downturn at only $50,000/month, your payroll would then move back to a more manageable, $10-15,000. As a business owner, how closely you adhere to this ratio means the difference between bleeding red and staying in the black.
Additional Benefits Include:
1. No payroll taxes or employee benefit expenses
2. No “on site” office space requirements
3. No costly training programs when hiring experienced VA’s
4. No long term commitment
5. No morale draining lay offs during slow seasons
Understanding the Relationship
When considering virtual assistants to help manage business tasks, there are a couple considerations to keep in mind. For starters, they are not your employee but independent contactors. This means they will most likely have other tasks and deadlines on their schedule while they are working for you. READ: They are on their clock- not yours. Make sure you are respectful of time constraints and provide as much advanced notice of tasks, deadlines, and special circumstances as possible. As with many business relationships, communication is critical. You can’t blame a virtual assistant for not living up to your expectations if you never made those expectations clear. In other words, don’t just say you need something “right away”, make sure you define “right away” as within two hours.
I also think it is wise to start slowly when building a new relationship with a virtual assistant. For example, instead of requesting that they create a new website for you, start by having them update your blog template first. As each task is completed satisfactorily, and communication strengthens, you can then proceed to larger and more complex tasks. Also, be sure to discuss with potential VA’s their strengths and weaknesses to ensure the best experience possible. If you are in the real estate field, consider searching for VA’s with backgrounds in real estate. If you an entrepreneur looking for marketing help, be sure to search for VA’s with a background in marketing or who are currently active in social media.
If you have never considered hiring a virtual assistant to build out your team, I strongly suggest taking a second look. As technology continues to advance and better networking platforms are built, virtual work relationships will only become even easier. A couple great places to start your search for virtual help include Guru.com, Freelance.com, RentACoder.com, or a simple “virtual assistant” search on Google.
Written by: Heather Nolte