(BIZTALKRADIO) SHOW 13: PROBLEM 1 - RAISING WAGES - WILLIAM EASTMAN

The next few shows will highlight problems business owners are having with talent.  Whether the issue is attracting, selecting, training, keeping, or compensating, this part of the series starts from the problem and works backwards. The first 12 shows focused on starting at the beginning - what and how to build an Employer of Choice operation. 

SUMMARY
Although this has been universally true for years, in the post-pandemic world it has become truer - is that even a word?

Not matter how small, the level of professionalism required for managing HR - people - has reached extreme levels. Small business owners in the past could manage all of the hiring, training, paying etc., or delegate to someone in an non-operational role like the accountant. I wish we were still in the world, but we're not. 

That is one reason for this show series - be your HR expert without paying for it. Now that is a deal.

TOPICS

1. Increase pay and benefits without raising prices - HOW?

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INSIGHTS
Labor costs, dependent on industry, should range between 20% and 35% of sales. That means for every dollar collected from a customer, 20 to 35 cents is a contribution to their compensation. If we start our thinking here, then it is possible to raise compensation without raising prices.

I will leave reducing costs which is another method of attacking costs for another show. Today we are going to stay simple - baseline your sales at 3 levels - best, worse, and mean - not average.

ACTION

1. Baseline you sales to provide a representative number.
   1. Best, Worst, Mean
   2. Day of the Week
   3. Hour of the Day (Shift)
2. Determine how much more you can afford to pay on the additional dollar. As sales increase your margin per sale will also increase, how much of that can you contribute to wages / salary.
3. Present the new compensation system to employees. Physically demonstrate how it works by creating a test week (last week) and show them how much more they would have made under the new system.
4. Create a visual tracking system where the information is appropriately posted. The scorecard needs to be updated frequently by them. Also ensure that computing the 'commission' for performance is easy to compute.
5. Test for a month and adjust as necessary. The decision criteria:
   1. You margins and net revenue (after commissions) has increased
   2. Your employees are the best paid for your industry in the local region.

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If you have any questions or comments related to this Show, please use the Comments Section below. Also what specific people problems are you having today with opening your business at full capacity or running it at that level - please leave those issues here. We will contact you on the show date your issue will be addressed.​