By Michael Cruz
Good news. The economy is doing well. Bad news. That will shrink the labor market. Often, I write about hiring and its associated pains. There is one way you can reduce that pain. It is investing in the people you already have.
We already know that it costs less to keep our customers than it does to acquire new ones. The same is true about the people that work for you. Hiring is difficult, it is expensive, and it is not a 100 percent solution.
Many years ago, I worked for a very fast-growing software company. When I joined it, the company’s sales were $18 million. When I left 7 years later, sales topped $450 million.
Amazing! One of the most stunning attributes of that industry was that we were all fairly young and inexperienced. We were a young company and we were a young management team. We worked to figure out our weaknesses and we brought in experts to address them. And that personal growth kept me loyal to the company. Even when I was offered more money to leave!
I outlasted every person that joined the company when I did. Many others quit. When asked why I stayed, I said: the growth afforded me opportunities.
Remember, it is cheaper to keep customers. It is cheaper to keep them than it is to replace them. The same is true of employees. They are even harder to find than customers, and even harder to replace. They are hard to train. The whole process is expensive. You want to keep your better people.
And your better people want to stay. They want to grow with you. They want to grow their skills. Continuous learning is part of human nature. Good employees always want to learn new things. Many people fear training people because they might leave. You are right, they might.
That is a risk. But, I know that I did not leave companies that invested in me. Employees like to learn new skills (and apply them). And, I know that people do not leave my clients when they get more training – and more opportunities.
So, how do you help invest in your business by training your people? During annual reviews, identify areas for employee improvement. You do not have to be the one to identify what training will help them. Engage them. Ask your employee to identify programs that might help them. Figure out the cost. Sometimes it is nominal, as in Fred Pryor training sessions. They teach basic skills for $100 or $200 and regularly come to our area. Sometimes it might include a more expensive program and even travel.
The purpose of growing your people is twofold.
One, it helps you accomplish more in your business. That should make you more money. Two, it adds some depth to your business. And, maybe—just maybe—it relieves some of the stress you have when you realize only one person in the company knows how to do a particular task. Make sure that what an employee wants dovetails with what your business needs. You want to grow the business, and this is a surefire way to help the business grow.
So, this costs money. Not necessarily a lot of money. And, you need to plan for it annually. However, keep in mind that this is not an employee cost. It is an investment in your business.
Cruz is president of Lighthouse Advisors LLC in Queensbury.