Zellers Consulting Group

Focus on the Workforce
As a recent article in the Wall Street Journal noted, many small businesses got lean over the last few months. They scrapped unprofitable projects, renegotiated costly contracts and leases, introduced policies that are more efficient and laid off workers. Now, after the recent employment reports have revealed that job losses have started to moderate, some business owners may be thinking about hiring. Ken Esch, a partner with Price Waterhouse Coopers' in Chicago said recently "a lot of small-to-medium-sized businesses see this as an opportunity to trade up and make additional investments to help the business move forward." Although many business owners are deferring their hiring plans -- aiming to continue squeezing more productivity out of their existing staffs -- aggressive companies are positioning themselves for future success by strengthening their workforces now.

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Management
focus
Build More

PROFIT
in you Business!
The Zellers Consulting Group provides consulting and manage me nt services to a growing list of small business clients. We offer our clients customized solutions linking business information with technology, strategy and execution. Simply put, we make our clients:

Are they thinking of hiring your workers? Poor leadership and management skills can drive employees to seek other opportunities – and for top performers, those opportunities will be increasing in number as the economy strengthens. Hiring new employees can be a very expensive activity. Assuring that managers have basic people and leadership skills is a great first step to building and retaining a high-performance team.

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More Efficient More Competitive More Profitable

...and we

Employee Retention – Ten Reminders (Plus One)
1. Managers should hold employees accountable through development and communication of clear performance and behavior standards for employees and by providing regular constructive feedback on performance and behaviors. Clear performance standards and consistent application of company rules should be fundamental tenets of management training and employee supervision techniques. Fairness is an issue – especially when the need to suggest positive behavioral alternatives to a subordinate arises. Honesty and candor are essential. If you have a problem with an employee’s performance or behavior, state it clearly! Sugarcoating a performance review will not improve employee performance or company results and may lead to disastrous legal consequences should a termination occur. If an employee fails in a situation, the manager should recognize his/her failure to develop and train the employee in how to achieve the specific objective(s) or task(s). Managers should never ask “why” an employee has done something. Responding to the word “why” requires justification and evokes defensiveness. Try something like “I would like to understand your reasons for…” “Constructive Criticism” is criticism dressed up to make the supervisor feel better. Criticism creates discomfort and defensiveness. Consider reshaping the conversation in such a way that it becomes a training opportunity. Take a positive approach on every issue. 2.

Guarantee our work!

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Zellers Consulting Group

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Management focus
Our Expertise
Strategic Planning Productivity Improvement Management by Objective Sales Team Management Business Development Gross Margin Improvement Process Re-Engineering Leadership Coaching Company Branding Product Marketing

Employee Retention – Ten Reminders (Plus One) (Cont’d)
7. Managers should encourage employees to listen to the substance of the discussion and avoid becoming defensive. Delivering constructive feedback through spot training - and doing it well -should be a key management skill and a management training issue. Both parties should recognize the difficulties inherent in constructive feedback and recognize its importance in transmitting the experience and decision skills required for growth. Ask the employee to confirm his/her understanding of the issues under discussion by restating it in the form, “If I understand you correctly, you are saying. . . . Is that correct?”

8. 9.

10. If either party feels uncomfortable after a constructive feedback discussion, they should say so: Boss, I feel like you are punishing me because you. . . Jim, I feel that you became defensive because you. . . When the company shares a set of clear performance standards implemented with fairness and consistency and supported by regular constructive feedback and training, you have created a Win-Win situation because you and your employees all share the same objectives.

A Few Final words on Employee Retention
If your company has an Employee Manual, make sure that all managers understand the rules and disciplinary procedures it contains. The legal system generally views an employee manual as a contract between the company and its employees. Be fair and always follow your own rules. Train your managers on coaching and mentoring. It will go a long way towards improving employee retention. Regardless of your company size and number of employees, if you are committed to becoming an “Employer of Choice” you must educate your management staff with leadership and people-skills training. Remember, if your turnover rate is high, chances are there is a problem within the management ranks of the company.

Management Training & Development Lead Generation Program Creation Inventory Management & Re-Alignment Performance-Based Compensation Plans

Is It Time to Expand Your Team?
Here's how to calculate whether you can afford to add workers: Estimate Future Sales Before thinking about hiring more workers, estimate your company's future sales. The longer the period you can project, the better. Sit down with customers and ask them about their purchase expectations from your company. Many companies will know their inventory situation and product needs month by month, and can estimate how much they'll need for the next 12 months. If you're counting on adding new customers or you have several promising projects coming on line, estimate how much those activities will return.

Coming in future issues:
Where’s the Cash? Fundamentals of Inventory Management Direct Mail Marketing Basics
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Zellers Consulting Group

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Management focus
From the desk of Ted Zellers
“To truly become a high performing company with greater profitability, you must plan for it, evaluate f i n an c i a l p e r f o r m a n ce and take action to address problems as they arise. To do this, you must have accurate and timely financial i n f o r m a t i o n, which you understand and use to measure the p e rf ormance of y our business.”

Is It Time to Expand Your Team?… (Cont’d)
Pinpoint Which Jobs to Add Identify specific jobs to fill based on your company's future needs. This can be relatively easy. For example, if your firm recently experienced a surge in product orders, you may consider adding manufacturing personnel. However, if your focus is on trying to drive demand, hiring additional salespeople may be the way to go. Project Added Revenues Estimate how much those new workers will contribute to the company. If they're helping build products or performing services, estimate how many products they can build or services they can perform in a given period. For an easier way to gauge their contribution, think in terms of units per hour. If one worker can build five units per hour and you can sell a single unit for $40, that worker can add as much as $80,000 of revenue a year. (Can you sell it?) Add Up Expenses Add up the costs associated with those new workers. Factor in their salaries, recruiting and training costs, as well as the cost of providing benefits. In addition, estimate how much new employees will impact your company's variable and direct costs. If you need to purchase more manufacturing or computer equipment to accommodate added workers, factor in those costs as well. Calculate Your Potential Profits Based on your firm's projected cash flow, determine whether your profit margins can support hiring more employees. If you determine it costs $40,000 a year to employ that worker who can build five $40 units per hour, and you estimate that you can generate $80,000 in sales because of that person's work, you can dust off the help-wanted sign with confidence. On the other hand, if you're planning to add sales staff, the equation is a bit foggier. Estimate the additional sales required from these workers to return a profit. Many businesses these days are going to want an immediate, one- to two-year payback on any staffing investment. Therefore, if it costs you roughly $65,000 to add a salesperson, you should plan to recoup your investment in a year or two. Consider Alternatives If your company's projected profit margins don't leave you enough room to hire more full-time workers, you'll have to find another way to meet demand. Consider hiring part-time employees, temporary workers or outsourcing certain tasks t o meet demand. This way, you can avoid lay-offs if the work disappears more quickly than you expected. Temporary workers can be expensive. If they are around for two to three months and they are working more than three days a week, you should seriously consider hiring full time.

For those of us in the business of helping other businesses survive and prosper, the greatest challenge may be initiating this discussion with our clients. At the Zellers Consulting Group, we believe making clients more efficient and competitive is our primary goal. We can assist virtually any client with a careful and objective evaluation of their direction and performance – and if warranted – provide them with the expertise to implement marketing, sales and operational improvements that will make their business more efficient and more competitive. Let’s make sure that our businesses (and our clients) stay strong and healthy.

www.zellersconsultinggroup.com
Questions or comments? Email us at: tzellers@zellersconsultinggroup.com or call

248-410-6882
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