Right now, as business owners are being bombarded by rising costs and even natural disasters, the easy way out seems to be cutting the wage bill to contain costs.
But businesses need to take a longer-term view and not simply retrench – they need to bite the bullet and invest in the future. That often includes retaining experienced and skilled staff.
Business coach, motivational speaker, author and entrepreneur, Cindy Norcott, created her company, ProTalent in the iconic year of 1994 at the age of just 23. Since then, she has experienced, first hand, a turbulent economy that has stretched from the years of euphoria and plenty post the appointment of Nelson Mandela as president to the doom and gloom of the state capture years and, now, the difficulties of post pandemic survival.
Pro Talent is a specialist recruitment agency based in Westville, Durban which operates both nationally and in strategic offshore locations. It offers a specialist recruitment service to assist companies to source scarce skills and talent in the fields of IT, finance, accounting, engineering and production and sales as well as marketing and management.
Despite continued protests about skills shortages and unfilled positions in both the public and private sectors, Norcott says that many companies are still downsizing to be as lean and as profitable as possible.
“The vagaries of the past two years have resulted in many organizations having to restructure themselves completely. Many companies realised, to their detriment, that the fat had crept in during the good years. It appears that the leaner organisations were better able to weather the storms,” she says.
That includes everything from economic storms such as load shedding and rocketing petrol prices to the flood damage in KwaZulu-Natal and even the severe drought in the Eastern Cape.
But the most vulnerable to the fallout are the more mature or tenured staff members.
“They have had the proverbial cross on their backs. They are often priced out of the market, having enjoyed year after year of generous annual increases. It has become a common practice for businesses to offer generous packages to these ‘expensive’ staff members, to down-grade the roles and to then replace these staff with junior, cheaper staff,” she explains.
However, this could well be short term gain but long term pain, she warns.
“When a company loses a tenured staff member, they end up losing muscle memory. The people who have been there a long time know the history of the company and are often custodians of the culture. When companies lose too many experienced staff in one go, it can cause a dilution in their culture as well as disruption in their productivity,” she points out.
Norcott notes that although many companies see their staff as their biggest cost item on their income statements, the flip side is that most businesses are absolutely valueless without their staff.
“I believe that employers should look at other items that can sneak up and add up and create hefty monthly costs such as rentals. Many companies have accepted annual escalations on their rentals. It might be the time to ask for a rental correction to be in line with the market conditions,” she suggests.
She also encourages companies to go through their expenses line by line on a monthly basis, asking themselves the following – is this cost necessary? Is there a cheaper supplier? Do we really need it or do we want it?
As a company owner herself, she also believes that saving money should never be the sole focus of a successful business.
“I think that employers need to ensure that their valued staff are engaged and happy at work. I recommend that they conduct STAY interviews, to ask their staff if they are happy and get their input on how they can have a better experience at work. Many employers forget to ask their staff what would make them more content and motivated at work. Often it is simple things that don’t actually cost much, such as flexible working hours, work from anywhere policies and quality coffee!
It is this ability to see the lighter side of a dire situation that has put Norcott’s latest book, How Does She Do It? on bookshelves across the country. She writes about the singular challenges encountered whilst growing her business as a female entrepreneur striving for a work life balance.
One of the most important values that emerges as the pages are turned is the value of good communication.
“I think regular communication is the key. I think management should always focus on letting staff know how the company is doing. Most employees don’t feel recognised enough. I also think that management needs to adopt a more modern approach, not castigating staff for being five minutes late or making it impossible for them to take leave or ask for an afternoon off. I think the approach of management has to be less on the inputs and more on the outputs of their staff,” she advises.
Most importantly, it is about making valued staff part of the business solution rather than part of its problems, she concludes.