Skip to main content
Your Employee Matters


By March 1, 2010No Comments

Companies nationwide are struggling to survive. One of the greatest mistakes they make while in this mode is to stop working “on”� their business and think that the only answer is to work harder “in”� it. This is a classic entrepreneurial error. Just ask Michael Gerber, author of “The eMyth.”� The competition is intense today and if you don’t distinguish yourself from your competition, how can you expect to recruit clients and customers from them? To succeed, we have to work not only on improving our sales and marketing acumen, but our workforce management acumen as well. The greatest “variance”� at any company involves sales and marketing. If one salesperson outsells another salesperson two-to-one, that’s a 100% variance. What many companies fail to realize is that the second largest variance has to do with how well they manage their workforce. As the HR That Works Cost Calculator shows, it’s usually 10% or more of payroll. For example, if you have a $1 million payroll, a variance will cost at least $100,000 the revenue equivalent of more than $400,000.

Here’s the point: This is no time to give up on improving HR practices. Doing so is a huge mistake! This doesn’t mean that you need to make an overhaul overnight it means that you should engage in constant and never-ending improvement, taking at least one proactive step a month. In today’s economy, I’d recommend working on improving productivity, motivation, making proper termination decisions, and stepping up your compliance effort. Given the doubled rate of unemployment, workers are filing more wrongful termination, sexual harassment, ADA, FMLA, and similar claims than ever. The average employee win-rate is the highest on record, as is the average verdict. Failing to get your compliance act together literally can put you out of business.