Try these ideas to reduce expenses in your company.
As the pandemic puts pressure on business leaders to reduce costs, remain financially viable and profitable so they can rebuild their businesses, astute HR Professionals should actively explore ways to reduce expenses without compromising the quality of their services and the productivity of their people.
Here are four options to consider.
Get your hiring right
Volumes have been written on the need to hire the right people and the associated costs with hiring mistakes. The cost of replacing the wrong person is estimated to run at around 20% of the employee’s annual salary. If you need to replace bad hires, you do the maths…
When it comes to replacing someone or hiring for a new position, resist the urge to rush the process. Doing your preparation work to get the job description right and allowing sufficient time to conduct the necessary interviews will pay dividends. If you’re looking to attract quality talent, put a hiring process in place that consists of comprehensive job descriptions with bonus qualifications, job duties, company info, a consistent interview process and the right information to eliminate unqualified candidates upfront.
Whoever is doing the interviewing must be trained to consider culture fit and not only skills match, as a culture mismatch is one of the reasons new hires don’t engage or stay in a company for too long. An excellent strategy is to make the interview process a team effort. Involving other members of the team, particularly those who will work with the recruit, has several benefits. It gives you a number of perspectives of the candidate instead of a one-sided view. It also results in a thorough interviewing process, as different people ask a wider range of questions. Peers working with the person will be able to give their input on the suitability of various candidates.
An added bonus to involving other members of the team is that it increases their levels of engagement. They feel empowered by being included in the interview process and more part of the team.
Automate your payroll
One of the areas in which costs can be reduced and even eliminated is payroll management. Errors in managing one’s payroll can have serious consequences, but there are ways in which you can eliminate such errors.
It’s almost unthinkable in these days of digitisation and automation for a company not to have an automated payroll system. Human error is natural and normal but completely unnecessary when automated payroll systems are easily accessible. Think about all those potential errors that can creep in when manually recording employee information such as salaries, deductions and other transactional data. What about keeping track of leave days and ensuring they’ve been correctly authorised?
The fallout when someone has been incorrectly paid has a devastating effect on the morale not only of the person concerned but also of everyone else with whom they share their story. When people are wondering if they’re going to be paid correctly at the end of the month, they’re certainly not going to be engaged or productive.
If your company has been limping along with a manual payroll system, now is a good time to move to a cloud-based solution that enables you to capture employee and related information, verify its accuracy, then allow the system to do what it does best. This sets resources free to do what they’re hired to do instead of engaging in continual fault finding and correcting errors.
Document good and poor performance issues
While it’s important to document the successes of your high performers so that you can acknowledge and reward them appropriately, it’s just as important to carefully document any incident involving poor performance. The best way to reduce poor performance costs is to nip them in the bud, rather than overlooking them simply because you want to avoid conflict. By catching such issues early, you’re able to give the employee a chance to correct the matter before one has to resort to disciplinary steps. In such a case, if you do not have meticulous records, you will pay a heavy price.
The old maxim of “prevention is better than cure” is the best way to reduce costs associated with poor performance. Proactive, pre-emptive steps to address performance issues are the best way to reduce costs related to poor performance.
Make employee training and reskilling a major priority
Any investment in the development of your employees is an investment in the productivity and profitability of the company. Training new hires ensures they get up to speed as fast as possible and can soon exceed expectations. This should start with a robust onboarding programme that supports them in the first few months of their employment and evolves into a professional development programme that continues during their tenure with the company.
Reskilling existing employees should form part of their professional development programme as it will keep them motivated and relevant by helping them to adapt to new developments and new technology. This reduces costs and enhances their productivity.
Gerhard Hartman is Vice President, Medium Business of Sage Africa & Middle East.