Beyond the spreadsheets and projections lies a gamechanger for your business — your workforce. As we enter the midst of planning season, it’s easy for business owners to focus solely on the numbers and use those to shape their goals for the new year. Although financials are vital, a business can’t thrive without the effort of its employees. In this article of our Countdown to 2024 series, we’re diving into the people-focused areas of a business that owners should assess during year-end and why it’s essential for leaders to not only prioritize but also routinely evaluate the status of their workforce. If you missed the last article in our series, we shared insights on tax planning and ways to minimize your business’s tax burden in the new year.
Staying Current on Recruiting
How effective were your business’s recruiting efforts this past year? Recruiting new talent continues to be a major pain point for many businesses, as the hiring landscape has grown more competitive due to reasons like increased remote opportunities. Gone are the days of having a “set it and forget it” recruiting procedure. Strategies should be regularly evaluated to see if your benefits package, job descriptions and pay rates are hitting the mark compared to your competitors so that you can stand out in the recruiting landscape.
Referral programs are also a great way to encourage your team members to assist with recruiting in a way that’s beneficial for both parties. Strong talent isn’t going to fall into your business’s lap; it takes having adaptable recruiting processes and staying current on hiring trends to market your business effectively to job seekers.
Putting a Focus on Retention
Recruiting and retention are often paired together, but they require completely different strategic approaches. Oftentimes a business focuses a lot of effort on recruiting new talent without focusing on the talent it currently has. When assessing your growth and personnel goals for the new year, it’s just as important to review the status of your current workforce. If your turnover rate is equal to or any bit higher than your rate of hire, your business’s growth will remain stagnant.
It’s all about finding a balance between attracting new hires and keeping existing talent motivated and happy. This goal can be achieved in many ways, but it starts with having an open and healthy culture. According to a recent study by Gallup, companies with a strong culture experience a 25% growth rate and can see an 85% net profit increase over the span of a few years. When considering ways to elevate your organizational culture, employee recognition programs, career growth opportunities and routinely asking for feedback via engagement surveys are all helpful options.
Establishing or Reviewing Your Succession Plan
Preparing for the future is a big part of running a business, but many owners put off doing so when it comes to succession planning. There are numerous reasons why succession planning is vital to the future success of a business, but here are a few main ones:
- Family support: In the event of an owner’s death or unexpected exit, a succession plan helps confirm that family members have access to funds or liquid assets.
- Reduces tax burden: By properly planning and gradually transferring ownership, business owners can avoid the unnecessary stress caused by the cost of income and estate taxes.
- Increase business value: A well designed succession plan makes a business more appealing to potential buyers or lenders.
- Sustained success: With a strong succession plan comes a higher probability of achieving a long-lasting business, allowing existing workers to remain employed and a business’s impact to continue benefiting its community.
Even if you may be a younger owner with no plans of retiring or transitioning leadership anytime soon, taking the time now to create a viable plan will help ensure your business continues to thrive no matter what the future holds.
Optimizing Your Workforce
Achieving and maintaining business productivity requires streamlined human capital management (HCM). HCM encompasses all the crucial areas that involve a business’s people, including HR, payroll, timekeeping, talent acquisition and performance management. Each facet should be routinely monitored to determine what areas are working well and which could use refinements.
Many businesses rely on technology to assist with their HCM, and if you have disjointed systems or a lot of clunky, manual processes, it can be difficult to track results and/or pull meaningful data. If this sounds all too familiar at your business, you may want to consider an integrated HCM system. Integrated HCM systems have become more popular in the marketplace because they provide a centralized location for all a business’s HCM data so that faster, more informed decisions can be made during planning season or at any time.
To stay competitive in today’s market, a business needs the right talent — and effective processes and opportunities to give that talent a reason to stay. When reviewing your year-end procedures this year, be sure to spend time on your current workforce and people-focused strategies in addition to your financials. At the end of the day, your workforce is the power behind your business’s success and deserves the utmost attention when it comes to strategic and future planning.
Not sure where to start? Creative Planning Business Services can help. Our team of business advisors has the experience and resources to assist clients with their most complex business challenges, including workforce management and succession planning. Schedule a meeting with our team today to learn more about our services and how we can refine your business strategies to achieve your goals.
In the next installment of our Countdown to 2024 series, we’ll cover all things business technology and the importance of having a strong tech stack. Thinking of making an upgrade in the new year? Then you won’t want to miss this article. Stay tuned for more!