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Zellers ISSUE 0 4 S EPT E MBE R 2 0 09

Focus on the Workforce
Build More
As a recent article in the Wall Street Journal noted, PROFIT
many small businesses got lean over the last few
months. They scrapped unprofitable projects, renegoti- in you Business!
ated costly contracts and leases, introduced policies The Zellers Consulting
that are more efficient and laid off workers. Now,
Group provides consult-
after the recent employment reports have revealed that
ing and manage me nt
job losses have started to moderate, some business
owners may be thinking about hiring. services to a growing list
of small business clients.
Ken Esch, a partner with Price Waterhouse Coopers' in We offer our clients cus-
Chicago said recently "a lot of small-to-medium-sized tomized solutions linking
businesses see this as an opportunity to trade up and
business information with
make additional investments to help the business move
technology, strategy and
forward." Although many business owners are deferring
their hiring plans -- aiming to continue squeezing more execution.
productivity out of their existing staffs -- aggressive
companies are positioning themselves for future success Simply put, we make
by strengthening their workforces now. 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 in-  More Efficient
creasing in number as the economy strengthens.  More Competitive
Hiring new employees can be a very expensive activity. Assuring that managers have basic  More Profitable
people and leadership skills is a great first step to building and retaining a high-performance
team. ...and we
Guarantee our

Employee Retention – Ten Reminders (Plus One) work!

1. Managers should hold employees accountable through development and communication of

clear performance and behavior standards for employees and by providing regular con-
structive feedback on performance and behaviors.
2. Clear performance standards and consistent application of company rules should be funda-
mental tenets of management training and employee supervision techniques. Fairness is
an issue – especially when the need to suggest positive behavioral alternatives to a subor-
dinate arises.
3. 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.
4. 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).
5. 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…”

6. “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. Page 1 of 3
Zellers ISSUE 0 4 S EPT E MBE R 2 0 09

Employee Retention – Ten Reminders (Plus One) (Cont’d)
7. Managers should encourage employees to listen to the substance of the discussion and
Our Expertise
avoid becoming defensive. Delivering constructive feedback through spot training - and
doing it well -should be a key management skill and a management training issue. Strategic Planning
8. Both parties should recognize the difficulties inherent in constructive feedback and recog- Productivity
nize its importance in transmitting the experience and decision skills required for growth. Improvement
9. Ask the employee to confirm his/her understanding of the issues under discussion by re- Management by
stating it in the form, “If I understand you correctly, you are saying. . . . Is that correct?” Objective
10. If either party feels uncomfortable after a constructive feedback discussion, they should say Sales Team
Boss, I feel like you are punishing me because you. . .
Jim, I feel that you became defensive because you. . . Business
When the company shares a set of clear performance standards implemented with
fairness and consistency and supported by regular constructive feedback and training, Gross Margin
you have created a Win-Win situation because you and your employees all share the Improvement
same objectives.

A Few Final words on Employee Retention Leadership Coaching

Company Branding
Product Marketing
If your company has an Employee Manual, make sure that Management
all managers understand the rules and disciplinary proce- Training &
dures 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. Lead Generation
Train your managers on coaching and mentoring. It will Program Creation
go a long way towards improving employee retention.
Regardless of your company size and number of employ- Inventory
ees, if you are committed to becoming an “Employer of Management &
Choice” you must educate your management staff with Re-Alignment
leadership and people-skills training.
Remember, if your turnover rate is high, chances are there is a problem within the
Compensation Plans
management ranks of the company.

Coming in
Is It Time to Expand Your Team? future issues:

Here's how to calculate whether you can afford to add workers: Where’s the Cash?
Estimate Future Sales
Fundamentals of
Before thinking about hiring more workers, estimate your company's future Inventory
sales. The longer the period you can project, the better. Sit down with cus-
tomers 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 Direct Mail Marketing
you're counting on adding new customers or you have several promising pro- Basics
jects coming on line, estimate how much those activities will return.
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Zellers ISSUE 0 4 S EPT E MBE R 2 0 09

Is It Time to Expand Your Team?… (Cont’d) From the
desk of
Pinpoint Which Jobs to Add Ted Zellers
Identify specific jobs to fill based on your company's future needs. This can be relatively easy.
“To truly become a high
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 performing company with
additional salespeople may be the way to go. greater profitability, you
must plan for it, evaluate
Project Added Revenues f i n an c i a l p e r f o r m a n ce
Estimate how much those new workers will contribute to the company. If they're helping build and take action to ad-
products or performing services, estimate how many products they can build or services they dress problems as they
can perform in a given period. For an easier way to gauge their contribution, think in terms of arise.
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?) To do this, you must
Add Up Expenses have accurate and timely
financial i n f o r m a t i o n,
Add up the costs associated with those which you understand
new workers. Factor in their salaries, re- and use to measure the
cruiting and training costs, as well as the
p e rf ormance of y our
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
For those of us in the
accommodate added workers, factor in those costs as well.
business of helping other
Calculate Your Potential Profits businesses survive and
prosper, the greatest chal-
Based on your firm's projected cash flow, determine whether your profit margins can support
lenge may be initiating this
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 discussion with our clients.
because of that person's work, you can dust off the help-wanted sign with confidence.
At the Zellers Consulting
On the other hand, if you're planning to add sales staff, the equation is a bit foggier. Estimate Group, we believe making
the additional sales required from these workers to return a profit. Many businesses these days
clients more efficient and
are going to want an immediate, one- to two-year payback on any staffing investment. There-
competitive is our primary
fore, if it costs you roughly $65,000 to add a salesperson, you should plan to recoup your in-
vestment in a year or two. goal.

Consider Alternatives We can assist virtually any

If your company's projected profit margins don't leave you enough room to hire more full-time client with a careful and
workers, you'll have to find another way to meet demand. Consider hiring part-time employees, objective evaluation of their
temporary workers or outsourcing certain tasks t o meet demand. This way, you can avoid direction and performance –
lay-offs if the work disappears more quickly than you expected. and if warranted – provide
them with the expertise to
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. implement marketing, sales
and operational improve-
ments that will make their
business more efficient and
more competitive.
Questions or comments? Email us at: or call 248-410-6882 Let’s make sure that our
© 2009 Zellers Consulting Group. All rights reserved. businesses (and our cli-
ents) stay strong and
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