"Keeping Your Good People"
It seems like every article I am writing, begins with "In these challenging times...". I have to confess, it's getting a little old. I am naturally an optimistic person and am tired of writing about doom and gloom, so I thought I would talk about how successful companies retain their best people.
Instead of getting into the "nitty gritty" of pay structures for drivers, I thought I would speak to the broader aspect of retention. Most companies we speak to are not having trouble filling the driver positions. Keeping good managers happy and productive can be more challenging. Gone are some of the financial incentives businesses could offer in years past, as margins shrink. So how do you keep key employees happy and productive? Here is a simple suggestion that may help.
Keep them informed. It sounds simple enough, but as owners, many times we tend to internalize and restrict access to key information. I am not a psychologist and didn't stay at a Holiday Inn last night and so I won't venture a guess, I can just report on what I see. A key to retaining good people, when giving them more cash is not an option, is helping your top people understand the numbers.
Anybody who knows me gets tired of hearing, "if you don't know the numbers you will never maximize your potential". I have yet to see a wildly successful company that doesn't have some sort of budget in place. Show your people budgets versus actual and don't keep them wondering. Everyone, from the owner down, believes that someone is getting rich. I am not recommending this for all your people but, help the appropriate people understand where the money goes. By including them in the process they will take more ownership in the results. Help them understand all the hidden costs and those imposing taxes you pay. Then give them incentives that are based on achieving your numbers whether monetary or otherwise.
We know of a successful company with an outstanding manager, but every 3-4 months this manager would come to the owner and reiterate how good he was and why he needed to make more. Finally, after hearing this again, the owner showed him the entire budget and talked about where the money would come from. Once the employee believed the owner wasn't hording some pile of cash, he understood and got on board for the long haul. He then provided some valuable insight into where he thought some cost cutting measures could take place and some opportunities for growth. He bought into the process. Having information, even if it is not always positive, is better than no news at all.
By keeping people informed, in many instances, you have a better chance of retaining and letting them contribute as you ride through the roller coaster ride of an uncertain economy.
| Re-evaluating Your Profitability | |
In the current economic climate increasing your profitability is a topic of concern to any small business owner. While some contractors are gaining business, many are trying to hold on to what they can. Evaluating the costs you incur to support your accounts may need to be revisited.  To assess customer profitability, you will need to determine how much it costs your business to attract and sustain each account. A simple cost of sales analysis will give you a rough evaluation for your customer base.The 80/20 rule - that 80% of your sales come from the top 20% of your customers - applies to most small businesses. Remember that profitability does not necessarily correlate with the amount of money a customer gives to your business. In many cases, smaller accounts can be highly profitable, while large accounts can cost your company a lot to administer, therefore leaving you with a smaller profit margin. That large account you landed 18 months ago (and is 45+ miles away) may not be as profitable as originally scheduled on your route. | |
| Maintenance Minute | |
 Hydraulic Fluid and Return Filter ReplacementNever replace hydraulic fluid when the engine or truck exhaust system is hot or warm.
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