There is a hackneyed old phrase we all have heard—it is trotted out often enough by business owners, advisors and managers. “Your people are your biggest asset”, they chant in unison. And who has not rolled their eyes at the sound of yet another hollow platitude that makes not one iota of difference to the lives of staff and business owners? Greg Mitchell, Principal Consultant at HR Success in Penrith, says it is not the cliché we should listen to, but the sentiment underpinning it.
An asset—as any trusty dictionary will tell you—is a positive quality, a benefit, a thing or a skill that gives an advantage. In business, we tend to use it to talk about objects—the equipment or premises that belong to the business. And that is perhaps where the problem lies: we think of assets as sunk costs.
“I actively encourage many of the business owners and managers I work with to see their staff as one of their most critical investments,” Greg says. It is an important shift in terminology—an ‘investment’ acknowledges the cost factor and emphasises the point that you can—and should—expect a return that will outstrip the original cost.
It is not a cheap investment by any means. A study by the Society for Human Resource Management revealed that total workforce costs average nearly 70% of operating expenses for more than 700 companies surveyed. That is because it is not just salaries and wages. Superannuation, recruitment, training, insurances and other factors all take a bite from the company coffers.
As your business grows, your staff—along with you—become your ‘front line’, representing your brand, building and retaining your customer base, dealing with questions and concerns, producing your product and delivering your service.
“Recruiting the right staff—and managing them well—is critical to the success of most businesses,” says Greg. “Effectively managing staff can be a real challenge for many business owners and managers. Apart from the need to ensure compliance with an increasing raft of legislation, managing the emotions and motivations of a diverse group of people can often make people-management seem more art than science.”
Greg’s experience with businesses of all shapes and sizes over the years has produced some insights into this ‘art’. He found that companies that consistently do well at maximising the return on their investment in staff have a lot in common—a clear vision and strategy, effective leadership, and performance and accountability measurement.
The exciting part is that this is no great mystery—just mastery of some key leadership and management skills. You might rely on your people, but reaping the rewards from your workforce investment ultimately lies with you.
get the best from
A clear—and shared—vision and strategy
Another cliché perhaps, but having a clear vision and strategy means knowing where you are going, and how you will get there. On that journey, it goes without saying, your staff need to be on board. Not only that, but they need to row together—and if you don’t want to lash them like Roman galley slaves, you also need their buy-in. So, they need to hear your vision and plans, and understand their part and why their contribution matters. If your heart is sinking right now, don’t feel bad—this is not an area in which Australian businesses excel. The HR Coach Research Institute found that only 22% of Australian SMEs have successfully aligned the activity of their teams to a clear business vision and strategy.
If you want your team to buy in to your vision for the business, you have to be able to earn their confidence. As well as having essential business knowledge, skills and experience, to be an effective leader you need to be authentic, personally engaging, consistent and able to purposefully grow and guide individual staff members—and teams. Some people are naturally skilled in leadership. For those of us that are not, leadership or management training is a worthwhile investment.
Your people need to know what you expect of them—not just so they know what specific tasks their job entails, but also so that you can give them the recognition they deserve for a job well done, and nip any problems in the bud. Position descriptions, induction programs, performance reviews, and staff recognition and reward programs all help to ensure everyone is on the same page.
Expectations sound great on paper—but to make them a reality you need a culture of accountability. For accountability to work you need to be able to measure how well your staff are meeting your expectations—and you need to partner that with appropriate consequences. Reward the successes and improve below-par performance with coaching, performance reviews or compulsory training.