Outsourcing 101 – What, When, How and WHO?
There is a lot of talk about outsourcing in this day and age. From complaints about businesses sending their labor offshore to accolades about the efficiency of the modern workplace through outsourcing, the discussion is rampant.
Clearly, there is a place for outsourcing certain tasks in your business but the question is what tasks, when do you send it “off-site”, how do you actually do it and to whom do you outsource in the first place?
In this article, we’ll give you a basic overview of outsourcing and throughout this article series, we’ll give you all the ins and outs that will help you to make a solid decision about taking the first steps toward making your business processes more effective using an outsourcing model.
What is Outsourcing?
The term “outsourcing” is pretty broad, but in general it is used to define any task, duty, job, process or function that might typically be performed “in-house” but instead is assigned to an individual or firm outside your own office.
Outsourcing can take many forms, including:
- Hiring specialty independent contractors to perform tasks that are not covered effectively in your current staff
- Contracting with outsourcing firms that offer a broad range of services
- Working with agency to help you find the right outsource contractors
- Using virtual assistants and other “work-from-home” contractors
- Using online services to handle “one-off” tasks
What Can Be Outsourced?
Virtually any task that can be done in-house can also be outsourced. Most business owners choose outsourcing as a means to have a “virtual” employee available to handle jobs that do not yet warrant a full-time, or even part-time employee.
Depending upon the specific type of business, you might consider using an outsource contractor or company to handle tasks such as:
- Accounting and/or bookkeeping
- Human Resources (HR)
- Customer service
- Technical Support
- Design work
- Web development
- Social media marketing
- Writing for blogs or other content pieces
- Creating presentations (such as PowerPoint or Keynote)
Many companies even hire outsourced “C” level positions such as an interim CFO, particularly when the company is in an early stage of development.
There is virtually no limit to what is possible to outsource, as long as you keep an open mind and consider the pros and cons of your decision to outsource.
How Do You Determine Tasks to Outsource?
Take a look at your organization chart for your company. Are you finding that multiple responsibilities are being assigned to one or two individuals? This might be a signal to consider outsourcing some of those tasks.
A simple strategy for outsourcing is to create a list of the positions, and associated tasks for each position, and then determine where you currently have holes in your processes or systems, or where there are places that can be run more effectively, or efficiently. Those areas are generally the first and most ideal candidates for outsourcing.
Who Do You Use to Outsource?
There are plenty of options for outsourcing and where you send the work is going to be largely dependent upon several key factors, including:
- What is the task that requires outsourcing?
- Is there is specific language requirement for the task to be completed properly? (i.e., does the outsource contractor have to speak fluent and perfect English?)
- What is your turn-around requirement for the task?
- What level of skill is required to complete the task?
- Where in the world is your outsource “source?” Time zone differences definitely play into your decisions about what tasks can be outsourced and how you manage that process.
In this series of articles, we’ll get more into detail about the various components of outsourcing so you can streamline your process and make good decisions about when to outsource, what to outsource and how to make the process efficient and effective for your business.
You’ve Been “All-In” With Your Business – What Do You Do When It’s Time to Get Out?
Entrepreneurs are a unique breed. We go into business for a variety of reasons and at the top of that list is freedom and independence, financial security, controlling our own destiny and of course, the all-important pursuit of our dreams. We spend years creating the vision, building the foundation and charting our course to success, but what happens when it’s time to move on, whether that means your own personal retirement or the sale of your business?
There are some key questions you may want to consider when planning your exit strategy or creating your succession plan. Different plans are better suited to different goals and different types of business owners.
Let’s examine some of the important elements that you should consider while preparing your succession plan or exit strategy:
- What is Your “Entrepreneur Personality” and Role in the Company? – It is often discussed that as entrepreneurs we tend to take on too much while we make ourselves an integral and indispensible part of the business. While a valid argument can easily be made that our vision and specific skills are at the core of what makes the business successful, that doesn’t always equate well to being able to walk away from the business when it is time to implement an exit strategy. Consider whether you are painting yourself into a corner by creating a specialized role for yourself that no one else can ever take over. To create true business freedom, you may need to replicate yourself. To create a viable exit strategy, you will need the business to be able to run without your direct involvement. Implementing an exit strategy from a business where you are currently an indispensible part can take years. Be sure to plan accordingly.
- What Are Your Objectives? – An important question to clearly answer for yourself is this: “What do you really want to achieve with your exit?” Sometimes this isn’t as simple as it sounds. Your objective might be to create financial security. You may want to include family members in your plan or plan to reward key employees for their service. Another option could be to create a business that runs like clockwork without you, so you can have the freedom to move into the next phase of your life. Regardless of your personal objectives, it is important that you are clear about it and set specific goals that meet those objectives.
- What Are Your Options? – You may need to educate yourself about the various options available for exit and succession. Does it make more sense to develop your business and prepare it for a sale? Would you like to pass it on to family members or your key employees? What about a merger with another company? There are numerous options available to you, depending upon your primary goals and objectives. Be clear about your intentions and it will be a simpler matter to choose a strategy that makes the most sense for you.
- What is the Current Status of Your Business? – In order to understand where you’re going, you have to know where you are. Once you get clear about what role you will take, your objectives and the best option for your succession or exit, then it will be a vital part of your planning to determine exactly where your business stands right now, in relation to the exit or succession goals.
- Executing Your Strategy – Once you have determined all of these previous important elements and how they all mesh and intertwine, it’s time to begin executing your strategy. Gaining clarity in every other area will give you a pretty solid idea of how long it will take to implement your strategy. You will likely discover that you need to start executing your plan two to ten years prior to your actual exit. There may be considerations and required changes that can take years to implement, such as the current condition of your business, your own estate plan, asset protection of both personal and business assets and more.
Some professional advice is probably in order to help you gain clarity about the best way to create your exit or succession plan; and the sooner you get some help, the better plan you will be able to create. Your Exit Planning Team will likely include your attorney, CPA, financial advisor and M&A specialist. You may also want to get your key employees involved, since they will be affected by your plan and can play an important role in your exit strategy.
A properly created and executed exit and succession plan can help you create the peace of mind you so richly deserve after having built success in your business, while it gives you a system for tracking your progress. Happy Exiting!
Are Your Policies and Procedures Helping
or Hindering Your Company’s Growth?
Very few people can actually say that they “like” rules (or at least they won’t admit it), but some types of “rules” are a necessity, at least in certain situations. When it comes to your company’s functionality and your plan for growth, the rules that govern your business are called your Policies and Procedures.
The term “policies and procedures” is bandied about pretty loosely these days. You will see the term on virtually any web site and it exists in some form in most companies. Do you have specific Policies and Procedures in your organization? If you do, it may be time to revisit how you are handling this important component of your business. If you don’t…let’s take a close look at how to implement Policies and Procedures in the most effective way to support your company’s growth.
When written and presented properly, your company’s Policies and Procedures can be a distinct strategic link between the company’s vision and its day-to-day operations. So why is this important to you?
Policies and Procedures – What’s the Difference Between Them?
Put in very simple terms, your company’s policies deliver its vision and goals, focusing more on the direction, while reflecting directly back to its culture. Procedures, on the other hand, are a specific system of actions that allow your team to effectively implement those policies, thereby meeting those goals. You could say that policies are a picture of your destination, while your procedures are the road map for getting there.
Here are some specific guidelines on differentiating between Policies and Procedures:
- Are general in nature
- Identify company rules
- Explain why they exist
- Tells when the rule applies
- Describes who it covers
- Shows how the rule is enforced
- Describes the consequences
- Are normally described using simple sentences & paragraphs
- Identify specific actions
- Explain when to take actions
- Describes alternatives
- Shows emergency procedures
- Include warning & cautions
- Gives examples
- Shows how to complete forms
- Are normally written using an outline format
Overcoming the P&P Challenge
One of the challenges facing you as you develop your policies and procedures is specificity versus flexibility. Of course, you want your policies and procedures to be specific, understandable and executable but it is also important to bring an element of flexibility into your processes so you don’t run the risk of being too “stiff” which can create a loss of motivation. For instance, it doesn’t make much sense to cultivate a culture of leadership, an ownership mentality and accountability, but then have every procedure require meetings or permissions for approval of a key process. Certain procedures must be exact, but others lend themselves well to a little rule-bending. Be sure to write your policies and procedures so you create that ideal balance between exactitude and flexibility.
How Do You Know When Your Policies and Procedures are Not Effective?
There can be some tell-tale signs that your current P&P’s are not matching your company’s current needs. You may begin to notice deterioration in morale, or in-effectiveness of your systems. Keep your eyes open for examples of the following:
- An increasing number of accidents or errors, higher failure rates or cost overruns
- An unusual
- A noticeable inconsistency in employee job performance
- An increase in stress levels on your teams
- Inconsistent review process and increase in employee turn over
- A high amount of discrepancies in benefit administration, exceptions or favoritism
If you begin to notice any of these signs, it may be time to reevaluate your company’s policies and procedures.
Even if it seems that everything is going well and it’s “business as usual,” consider reviewing your company’s policies and procedures on an annual or even semi-annual basis to assure that they are meeting your current vision of company culture. This can be part of your company’s strategic planning sessions as you evolve into new sets of goals and visions for your future.
Times are changing. Every day, small business is taking on a more responsible role in the community, and in the world, and those changes are developing from the inside out, as part of an evolving corporate culture. A greater emphasis on authenticity in your message and developing a supportive, but effective, corporate culture, coupled with a clear movement toward personal accountability at every level of business, is creating new opportunities for growth, from both the bottom line profit and the employee satisfaction perspective.
In our recent articles, we have been building what we believe is a strong case for the positive impact that these changes can have on your business and in the next few articles, we will emphasize how to make adjustments in your internal operational strategies that work to your best advantage, from accountability, to policies and procedures, to planning your ultimate exit strategy.
One of the keystones to your success is developing a culture of Accountability. Simply defined, accountability is accepting responsibility for your actions. Historically, this has been interpreted as “owning up to your mistakes.” But, there is another side to accountability: “Taking responsibility for doing the job well.” Rather than simply accepting responsibility for mistakes, what if we cultivate a culture of doing the job right in the first place, by taking responsibility for the expected outcome? This may seem like a simple semantic difference, however, that slight shift from “fixing a problem” to “doing it right the first time” creates a new, more positive view that supports your big picture. When employees and owners are focused in the same direction – one that supports the company’s goals and strategic plans – company growth and increased profits are sure to follow.
Having an Accountability System established in your workplace (using Policies and Procedures that will be addressed in a future article) will accelerate the process of establishing accountability in your company.
Here’s a simple Five Step Plan you can use to promote accountability in your business.
- Make Sure Your Team Understands the Big Picture – Any accountability system has a far greater chance of success if everyone who is expected to be accountable understands the intended outcome. Take some time to meet with individual team leaders, management and team members to convey the vision and assure that everyone is enrolled in – or at least has a clear understanding of – the vision you want to create.
- Have Clearly Stated (Written) Expectations – It has been said that “one bad apple can spoil the bunch.” Such is the case in business as well. If even one person does not live up to the stated expectation, then the entire team can fail. It follows that if the expectations for a project are not made clear in the beginning, then accountability also falls by the wayside. Be sure your teams clearly understand the expectation for every project and if you have to, repeat the expectation until you are certain that it is made crystal clear.
- Create Accountability “Mastermind” Groups – To bolster the concept and actions around accountability, there is nothing like having a group to which you are held accountable. Mastermind groups are a great way to provide an open forum of communication, share ideas, create solutions and work together to overcome weaknesses and challenges. Consider having team leaders and team members “cross-pollinate” too. In other words, have team members working on separate projects work together in a mastermind environment. Oftentimes, you will discover that the person who has the least amount of experience in a particular area can offer a simple solution that no one else thought of, simply because they weren’t aware of what everyone else thought wasn’t “possible.”
- Be Clear About the Consequences of Failure – For any accountability system to be truly effective, teams need to clearly understand that there are consequences for failure to complete a project. So, be sure that you have specific written guidelines for what teams can expect in the event of delays, failures and mistakes. Without consequences, your system won’t be taken seriously.
- Reward and Recognize Success – Just as you should have consequences for failure, it is equally (or perhaps more) important that you have a reward and recognition system in place. As we have strongly emphasized in previous articles, employees will do more for recognition than they will do even for money. Consider how you can provide extra rewards, perks and benefits to reward a job well done.
Having a system of accountability in place is just another step toward moving your company culture into a place that supports growth, enhances the very best in your employees and promotes an attitude of ownership that leads to successful outcomes for your company.
Who Gets a Piece of the Pie?
In our previous article, we discussed various aspects of profit sharing as well two different strategies that are commonly used to implement a profit sharing plan for your employees.
That article raised several questions about a different method of sharing the wealth in your company — Equity Sharing – and the differences between the profit sharing and equity sharing models.
So, what is the difference? While profit sharing can include a position of actual ownership in a company, typically the profit sharing model does exactly as its name implies; it provides a proportionate share of the “profits” of a company based on a formula created by the company as a benefit to qualified employees.
On the other hand, equity sharing provides for a share of actual long-term ownership in the company through stock, stock options, membership shares and other equity vehicles. An equity sharing plan often only applies to founders, executive level employees and upper management, although it is not uncommon – and certainly an important consideration — for a company to provide an equity share model for its employees as well.
It is relatively easy to get excellent technical information about the various equity sharing tools, for example: stock options, stock appreciation, performance shares and restricted stock. It is also a relatively simple task to research general guidelines for equity ownership in publicly traded companies. However, it is a different matter altogether to discover the ins and outs of crafting an equity sharing plan for a startup or closely held company.
Let’s take a look at some of the key considerations and questions you must answer prior to implementing an equity sharing plan:
How Much Of Your Company Will You Share?
This can be a tricky question. The “typical” approach is to offer a percentage of the stock. Many times that number is randomly chosen at ten percent (10%). Whatever the number, many owners adopt the mindset that there is some percentage of the company they are willing to share. However, this can create its own set of challenges. For example, what happens if you distribute your chosen percentage, but then the company expands and you need more equity to share with the your employees. Or what if your chosen percentage turns out to be worth less than you anticipated, so you lose the incentive nature of your equity share plan?
You might consider another approach, for example, distributing ownership shares on a sliding scale based on meeting certain goals or targets. In other words, you would distribute more if key goals are met and a lower amount, or perhaps none at all, if those goals are not met. This model provides an equity position with the extra incentives similar to the profit sharing model.
Who Will Receive Ownership?
It is natural for many owners to consider only “key players” to include in their equity sharing plan. This is certainly a decision that lies solely with the current owners of the company, but one consideration is to think a little “outside-the-box” about equity sharing and treat it in much the same way that you would a profit sharing plan. An example might be to create a program wherein everyone can qualify by meeting certain milestones or requirements. We have already established that the profit-sharing model is a strong motivator for employees to think like owners. Offering a similar model that allows them to actually be owners could be just the incentive you need to create the growth you want in your company.
How Much Will Each Person Receive?
There are a number of approaches you can take here, including many of those discussed in our previous article on profit sharing, such as time with the company, position held, overall performance and anything else that you choose. Create a model that is big enough to attract, motivate and retain important employees, but also one that is not so large as to create a burden on company assets.
What Type of Equity Will You Choose?
Assuming that you are creating your equity share in a corporation, then your stock options can take two different forms: non-qualified and incentive. In simplest terms, increase in value of non-qualified equity is taxable as income to employees when they exercise the stock option and deductible to the employer at that time. The incentive model may qualify for capital gains treatment and not be taxed until the sale of the stock, as long as certain rules are met. Using this model, the employee does not get a deduction and it is possible the employee may have to pay an alternative minimum tax.
Getting More Help – Legal and Accounting Issues
There are numerous issues that need to be addressed prior to implementing your equity sharing plan such as frequency of distribution, deferred compensation issues, non-qualified versus incentive stock options, conditions surrounding restricted stock, stock appreciation rights and all the tax ramifications of these choices to both the employee and the company.
It is important to choose a professional advisor with extensive experience in the area of equity sharing plans. Typically, when you choose the right advisor, you can get the information you need in order to make all the crucial choices in a relatively short consultation of just an hour or two.
Profit Sharing Plans to Promote the “Ownership” Mindset with your Employees
Savvy CEOs understand that high levels of employee performance are directly tied to how much they feel a sense of ownership toward the company (whether fiscal or based only on dedication). In a profit sharing plan, employees participate in a share of the profits from the company but profit sharing is typically distinct from actual equity ownership, which will be discussed in a future article.
As we have discussed various ways you can incentivize employees over these past few articles, a clear pattern has emerged: Employees are not always most motivated by money. However, it is interesting to note that when it comes to “profit sharing” plans, there can be a clear exception…but again, this motivation doesn’t have as much to do with money as you might think.
Because your profit sharing plan is tied directly to the company actually making a profit, the strongest motivator for employees is that sense of ownership they get by participating in the profit sharing plan. The bottom line is that if they can help improve profits, they also get to reap the rewards. When your employees adopt a sense of ownership in your company, you virtually always see increases in productivity and a reduction in costs and expenses, which in turn leads to increased profits.
How Do You Implement an Employee Profit Sharing Plan?
The first and most important step prior to implementing any profit sharing plan is to be sure that you are clear about what you want to accomplish with it. Do you want the profit sharing plan to function is part of a retirement benefit? Are you more interested in a long-term motivation tool? Or does it make sense to keep it simple and structure your plan as a “bonus” cash distribution?
Although there are many variations on profit sharing plans, there are generally two primary methods of profit sharing to consider (terminology can vary depending on the information source):
- The “Retirement” Plan Version – This method offers employees the opportunity to contribute a predetermined amount of their annual profits into a deferred payment vehicle, such as a trust that the employee can access upon retirement from the company in much the same way that they would make a contribution to a standard retirement plan, such as an IRA or 401(k). While this is not the same as the employee’s retirement plan, this profit sharing plan structure is still subject to regulation by the IRS and has specific parameters for implementation. This plan can also take the form of a “Cross-Tested” that favors companies with an aging work force who are considering how they will fund their retirement.
- The “Basic” Plan – This plan has become increasingly common in recent years and involves a relatively simple allocation of funds providing essentially the same percentage or dollar amount to each employee who is participating or who is vested in the plan. This is the least costly to administer.
What Are the Qualification for Your Profit Sharing Plan?
Another important consideration as you implement your profit sharing plan is how you will qualify employees to participate. There are many different criteria you can use.
Here are a few suggestions and ideas you can use to create your qualification criteria:
- What is the employee level in the company? (i.e., supervisor, manager, executive, etc.)
- How many years has the employee been with the company?
- How is the employee’s attendance record?
- How has the employee done in the most recent performance review?
- Will you include a “special performance” multiplier for employees who do something special or who consistently produce desired results?
You will also need to consider how often you will pay out on the profit sharing plan. At what point can you pay out on the plan so it really feels like a big enough reward to keep employees motivated?
A profit sharing plan can be a powerful motivator and greatly enhance employee performance, along with helping you to keep your employee “enrolled” in the process of creating company success. The primary challenge to overcome in implementing a profit sharing plan is the planning and decisions surrounding how to structure your plan. Once implemented, consider creating an event around announcing the new program to your employees and kick off the new plan with a high level of engagement. In the end, you will likely reap great rewards by implementing a profit sharing plan in your company.
Cultivating Creativity and Motivation
in Your Business by Thinking Outside the Box
It would be very easy to assume in today’s economy that your options are limited when it comes to creating higher levels of motivation and engagement in your workplace. After all, many companies are cutting back on benefits, reducing hours and putting a freeze on any raises in compensation. In our recent articles, we’ve been discussing the most viable incentives for your employees and you may have been surprised to learn where the key motivators really are.
What if you could create an environment where the “magic” internal culture message is:
“The pay may not be incredible but the PERKS are awesome!”
There are some fun, out-of-the-box ways you can provide additional perks in your company simply by thinking creatively, and many of these can cost your company very little money but can pay off in big dividends by keeping appreciation, motivation and creativity at an all-time high in your business.
Moreover, by offering creative perks in your business, you are developing a new culture that inspires and motivates, while lowering levels of burnout and apathy.
Here are a few creative methods for “showing the love” for your employees that have been used in recent times by other businesses:
- Offering paid time for working out or participating in health programs.
- Arranging on-site pick-up and drop-off of employees’ dry cleaning or laundry.
- Serving healthy/organically grown snacks and meals at work and having them delivered straight to employees’ desks.
- Allowing employees to spend up to 10 percent of their time developing work-related projects or doing research they choose for themselves.
- Having a “cleaning rotation” where a professional cleaning crew is hired to clean up employees’ homes with a new employee receiving the service each month.
- Offering “family movie night” with tickets to movies and money for popcorn/snacks.
- Creating a policy of “decorative freedom” so employees can decorate their office or cubicle in whatever way they choose.
- Providing unpaid time off during the summer or other slower times to give your employees flexibility
- Offering gas cards or transit passes to ease the price of commuting
Remember, your employees are looking for reasons to feel appreciated and special and thinking outside the box is a great way to show them that you’ve really put some thought into what might be fun, useful and valuable for them.
Consider spending a day with your key executives and management to brainstorm the possibilities of what you could offer in your company. There are no “bad” ideas in a brainstorming session, just ideas for consideration. Let your thoughts run with the possibilities and see where it leads you.
The idea is that you’ll end up with some valuable and creative incentives that will “perk up” your benefits plan and develop a deeper culture of happier, more motivated and creative employees.
Wouldn’t it be just perfect if we could hire employees that had the same passion and drive to move your business forward that you as an entrepreneur have? You may be surprised to discover that this can be easier than you think; especially if you consider inspiring an “ownership attitude” right from the first interview with a potential new employee.
In our previous article, we discussed some of the most important motivators for employees and you probably realized that employees are often motivated by factors that go far beyond compensation.
Imagine for a moment the vision that you have of your business as you move into the future. If you could write the script for how your business looks a year from now, how would that movie play out? Can you envision happy, motivated, creative employees working like they own the place?
Here are a few tips on how to motivate and inspire employees:
- Start at the Hiring Level – We’ve all heard the old sayings: “you can’t teach an old dog new tricks” or “you can lead a horse to water….” Similarly, it takes a lot more effort to shift an employee who already has a “less than ideal” attitude into the right place in your culture than it does to simply hire the right people from the onset. Sometimes the perfect skill set is far less important that the right attitude, especially if your intention is to create a particular culture of inspiration and engagement in your business. You can usually train a person with the right attitude in a new skill set far more easily than you can you train someone with the right skill set but who exhibits the wrong attitude. Attitude is everything! When you’re hiring new employees, consider the energy, attitude and general motivation of the person you intend to hire. The goal is to match your culture with the attitude and values of the employee. Skills can be taught; attitude is usually a natural trait.
- Inspire “Ownership” by Letting Employees Own Their Work – To the extent it is possible in your business, allowing your employees to take complete ownership of their particular task level, or department, or management processes has proven to be one of the most motivational steps you can take to inspire your employees. This can mean allow your employees to have more decision-making power and autonomy in their work or providing opportunities to increase responsibility and management of their own projects. Of course, you will want to make sure there are checks and balances in the process and accountability, but there are very few things more motivating to your employees than having responsibility and autonomy in their own projects, even for smaller task work.
- Actually Give Your Key Employees Ownership Through Profit-Sharing – Do you really want to inspire the highest levels of “ownership” attitude and engagement in your business? Consider an alternative model of compensation that includes a profit-sharing plan through your benefits package. There is nothing that will inspire a sense of ownership with your employees than actually feeling like they are owners. If part of the vested employee compensation plan includes profit-sharing, the level of motivation and accountability for your company’s outcomes can increase tremendously. We’ll explore in more detail various profit sharing models and options in an upcoming article.
A business can only be as successful as the motivation level of its owners, managers and employees. Making just a few adjustments in how you create that culture of motivation and inspiration around your business can reap huge benefits to your overall success and bottom line. You’ll be able to inspire the very best from everyone in your organization and your increased profits will be well worth the time that you take to make these improvements in your organization.
Employee Morale Directly Affects Your Company’s Success
It is easy to assume that in this day and age, as we are facing a challenging economy, that most employees are just happy to have a job. While there may be some truth in that, studies done over decades are showing that employee motivation is a key to the company’s success. Even in a challenging economy, your employees won’t stick around without some solid motivators. But you’ll be surprised to learn what some of the most important morale boosters are for your employees. Contrary to conventional wisdom, incentives in the form of money and other financial compensation are not necessarily the most effective ways of increasing employee morale.
Motivated and positive employees are more focused, more dedicated and definitely more enrolled in the company’s vision and objectives. Even when your employee has negative feelings about the company and they don’t choose to leave, their decreased performance can cause serious problems for you.
You might be surprised at what the highest motivators are for your employees, and over the next few articles, we’ll be discussing ways that you can in increase your “human bottom line” by addressing some of the most important motivators for your employees.
Let’s take a look at 7 ways that you can increase employee motivation:
- Praise and commendation from management for work well done – Reviewing studies and surveys done across a wide variety of industries, you will find that by far, praise and commendation increases employee morale and productivity more than any other single action you can take in your business. Receiving praise, both privately and publicly for a job well done, is a high motivator for employees as well as management. Everyone likes to feel that someone notices and cares that they are doing a good job.
- Providing opportunities to lead projects or take on more responsibility – Another high-ranking motivator for employee morale is providing increased opportunities for leadership and responsibility. Surprisingly, recent studies indicate that even in times when financial incentives and even workforces are being cut and employees have additional task work added to their current load, they are still ready to take on more responsibility in the form of leadership. These opportunities provide a sense of “advancement” even an environment where financial promotion may not be possible in the immediate future.
- Increasing autonomy and decision-making power – Along with leadership and responsibility, giving employees the opportunity to have more independence in their decision-making also contributes to motivation. Find ways in your organization that you can allow employees to make decision, even if it means that they (and probably you) have to learn from their mistakes from time-to-time.
- Providing and open forum for feedback and staff interaction – Honest and open communication is cherished in the workplace, at least by employees. Your employees want to feel that they have an open forum to provide feedback, whether it is regarding current projects, problems that they see in the organization or even understanding where the company may be experiencing challenges. Providing a platform that allows your employees to interact with management and/or human resources to provide their feedback can provide a significant increase in employee morale.
- Creating variety and the ability to use different skills – Even when you love what you do, performing the same tasks over and over gets tedious and boring. If you can allow employee job descriptions to provide some flexibility in the way tasks are performed mix up the tasks, allowing people to use different skills over the course their day, you will find that employee engagement increases.
- Offering flexible work schedules and dress codes – The “good old 9 to 5” isn’t necessarily etched in stone in the business world anymore. More and more, companies are allowing employees to have more flexible schedules because of family and other personal obligations. In fact, many savvy business owners are realizing that some of their employees actually do their best work at times outside “normal” business hours or when they are working from home in a “flex schedule.” Where it is appropriate in your business, consider allowing flexibility in both hours, where the work takes place and in general dress code. Providing this type of flexibility, you may very well find that your employees are more creative and more productive.
- Starting or expanding an incentive-based employee profit-sharing plan – There is no question that employee performance and engagement is directly tied to how vested they feel about the company their work for. An employee profit-sharing can be a powerful incentive for employees to be more productive and gain a sense of satisfaction from knowing they will get a share of the profits.
Your employees are the engine that drives your business. How you treat them and appreciate them will directly affect the bottom line of your business. Consider implementing some of these strategies to increase your employee morale, engagement and long-term stability and you’ll be pleased with the outcome to your financial bottom line and just as important, your human bottom line.
The Primary Differences Between Your CFO and Your CPA
In our recent series of articles, we have been discussing the key roles in your accounting department, and clearly defining those roles, and the duties of each, including those of your Chief Financial Officer (CFO) and your Certified Public Accountant (CPA).
The CFO and CPA are two accounting department roles that are often confused and misunderstood by business owners. As you read in our recent article, while the roles of the CFO and CPA may sometimes overlap, they are actually completely different in their scope.
What are the primary differences between the CFO and CPA?
Your CFO is part of your “C-team” – he or she is the executive who is primarily responsible for overseeing and managing all the various financial aspects of your business. CFO duties and responsibilities include increasing the profits of the company – the all-important “bottom line.” The CFO is focused the long-term financial success of the company and making sure the company is meeting its ROI goals in regards to time, resources and direct investment.
Your CPA’s primary focus is on preparing tax returns and advising on tax strategy in general, usually focused on the immediate tax needs. While your CPA should always be in direct collaboration with your CFO, providing insights into all aspects of taxes, the CFO and CPA roles are generally distinct from each other.
Even though it is quite possible that the CFO and CPA in your organization may have similar training, educational backgrounds and experience, your CPA should be more focused on understanding the tax ramifications of company decisions, budgets and spending patterns, while your CFO’s position is more strategic and has a longer-term view and focus. Your CFO is in the position to monitor all of the company’s financial systems and report to the CEO about the most effective means to invest company resources to promote long-term growth.
Short-Term or Long-Term View?
In general, you can say that some of the primary differences between the CFO and CPA roles have to do with short-term versus long-term strategies, or specific focus versus a broader company focus:
- The CPA focuses on the best and most immediate tax strategies for your company, while the CFO must be sure to keep the future success of the company in mind at all times.
- The CPA’s role is always reviewing the numbers from the past in order to plan for the future, but strictly in the tax planning and preparation context. The CFO must then evaluate that financial information in order to plan for growth, acquisitions, raising capital and future performance to determine where the company needs to reassess its financial strategies to meet its goals.
- While the CPA is responsible for making certain that the company maximizes its tax benefits and returns, the CFO needs to clearly understand a broader company perspective, often including how financial decisions effect other departments such as marketing or manufacturing, all the while keeping a clear view of day-to-day operations.
The two positions are distinctly different, however, they should also always complement each other. They are like the guiding left and right hand of your financial and accounting department. If you ever get into hot water with taxing authorities, your CPA is your strongest ally and as your company grows, the CFO is the key financial strategist to assure your company’s continued growth.
While it is possible that either the CFO or CPA roles may be performed on a part-time basis, or even outsourced, it is important to understand the important distinctions between these two vital roles in your accounting department so you can properly assign the tasks suited for each role.