Massive retail chains are closing down in unprecedented numbers. By September, retailers had already announced 8,567 store closures for 2019. That’s more than the entire year of 2018.
With chains that used to be the backbone of their industry shutting down, many small businesses are feeling the pressure. If previous industry leaders are going out of business, how can a small company survive?
Some feel that the only way to ensure their company’s survival is to put short-term profit above everything. After all, cash is essential to keeping your business going. It’s also easy to measure how much income you’re bringing in. However, chasing profit can actually sabotage your growth. How?
Some companies prize revenue to such an extreme that they cut corners with employees by underpaying or overworking them. Whether it’s creating a company culture of fear by punishing staff who bring up issues or refusing to hire more workers and burning out the ones they already have, prioritizing short-term profits over talent will only hurt your business long-term.
Why will investing in talent help your company more than short-term profits? Let’s learn about three ways that focusing on talent is better for your business than focusing on profits.
If you try to grow your business by inflating profits for a short period, it will only set your business up to collapse. Focusing on revenue hurts your most valuable asset: your employees. The short-term profit pitters out once you run out of employees to take on the work.
Neglecting your workforce by overworking your employees makes them prone to burning out. Best case scenario? A high burnout rate forces your staff to look for a different job. Worst case? Pushing your workers too far ruins your bottom line.
General Motors has lost an estimated $2 billion from an employee strike. After disputes regarding healthcare and higher wages for new employees, the United Auto Workers union initiated a strike for its members. General Motors had refused their employees’ demands to save cash. However, the strike was so expensive that putting their staff above profits and meeting their needs would have actually saved the company more money.
Investing in skilled employees can be the easiest way to grow your business. Keeping your current workforce happy helps you retain your employees and take on larger jobs. Experienced employees can also train new workers.
However, it’s challenging to find more employees, no matter how much you need them. With the biggest hiring crunch in years happening, you have to invest in your hiring to get the right applicants.
It’s tough for companies to bring in new employees in a tight labor market. In 39 states, there are more jobs than people looking for them. With so many businesses competing for employees, it can be tempting to put your resources into increasing profits rather than hiring.
However, ignoring your company’s need for staff impedes your growth. Companies with poor labor management often have to turn away work because of employee shortages. Amerequip Corp, an agricultural, landscape, and construction equipment manufacturer, had to turn away $10 million in work contracts because of their labor shortage.
Your business can’t afford to lose out on clients because you don’t have enough employees. If you’re going to expand, you need to be able to hire more staff. What’ll entice job candidates to apply for your company?
Investing in employee benefits can draw in applicants. Offering higher salaries, better benefits, or a flexible work schedule will attract skilled workers. These come with a higher price tag, but they’ll get you the help you need.
While focusing on revenue can slow down your company’s hiring, it can do even more damage if you let it affect your company culture. How can talent prevent serious problems from going unchecked in your business?
Putting revenue first can send a message to your staff that money is all that matters. If your company picks up on your attitude, then employees may start cutting corners to meet the business’s financial goals.
From unrealistic deadlines to product flaws, your staff may feel uncomfortable speaking up about major issues because they’re worried they’ll get the blame. Letting issues go unnoticed can lead to poor quality products and a bad reputation in your industry.
Valuing profits over production can even cause your products to be unsafe. Boeing’s new 737 MAX was supposed to help them compete with other airplane manufacturers. However, a shift in the company from listening to the engineers to listening to investors made Boeing’s culture more money-oriented.
Employees didn’t feel comfortable bringing up assembly problems, and efforts were made to produce the new planes for a lower cost. Ultimately, two 737 MAX planes crashed after sensor and software problems made the planes behave unpredictably. Prioritizing cash over products cost Boeing its safe reputation and cut into its profits.
Creating a great product will help your business grow more than zeroing in on profits. Investing in talent shows your employees that you value their input. Then, they’ll be more willing to speak up when something goes wrong. Showing your staff that you value quality products over short-term profit protects your business from major issues.
Your employees are the first line of defense when it comes to serious issues. Putting talent above short-term profits can make your business grow. Are you investing in your workforce?
Major retailers are closing down at unprecedented rates, so it’s easy to worry about your small business’s chances. Focusing on revenue can seem like the way to protect your business, but investing in your staff can be an easy way to help your company survive.
Putting talent above short-term profit can increase your company’s chances of survival and help you expand. Investing in more employees allows you to take on more work and grow your business. Centering your company culture around your products and employees prevents issues from affecting your customers.
How can your business survive when retailers that used to be leaders in the industry are closing down? Your company’s talent can pave the way to long-term survival better than short-term profit.