Over the last ten years we have seen a tremendous cutback from almost every type of company when it comes to work staff. These cutbacks, layoffs and downsizing were mostly attributed to a shrinking of the overall economy and the resulting waning profits. It was understood that everyone who remained employed would now need to stay focused on their particular job function and be willing to lend a hand if covering other new functions as well. There have been many articles written on this phenomenon with its advantages to the company and the hardship it, at times, put on those employees. There is another consideration however that has had little mention – the loss in overall profit to some companies due to employees who once were focused on revenue producing activities now splitting their attention to non-revenue producing activities. I like to call this a “Soft Dollar Loss”.
Let me explain in an overly simplistic manor. In your company you have one person who makes a product or provides a service. Each time they complete that task they generate revenue for you. This could be a nurse seeing a patient, a bookkeeper balancing a checking account or a chef making a pizza. The second person is responsible for setting up and billing for those products or services. Each of these people plays a vital part in your company and its profitability. Any time that they take away from completing those job functions it has a direct negative effect to your bottom line by a service not being provided, a patient not being seen, a delayed bill going out or the pizza not being made.
Keeping this in mind, let’s now consider how having to hire a new employee can cause your company a substantial ”Soft Dollar Loss”. When your company starts a candidate search one of two things has occurred; either you have lost an employee and you need to replace that person, or you are experiencing a growth in your company and need to expand. In any case, you more than likely have a current staff member that is being stretched to do more while these vacancies are left open. How will you fill this position? Will you run an add, costing you dollars, in hopes you will get the right candidate? Will you search the internet for resumes? Being a professional employer, I can guarantee both options will yield your company hundreds upon hundreds of resumes.
Candidates can often range anywhere from extremely under qualified, to not even remotely appropriate for your position. Going through these resumes takes copious amounts of time while you weed your way through an ever dizzying amount of paper. Once this phase is complete you now will begin to call each candidate and speak briefly with them on the phone prior to setting up an in person interview. What I have found and I’m sure you have as well with these interviews, only about 78% actually show up. Of those who do show up, a large portion will not be dressed appropriately, spend all of the interview telling you everything that was wrong with their last job, smell like their little furry friend at home or just not fill your needs. This will send you back to step one where you are running ads and reviewing resumes.
When you do get lucky to find the right candidate, make an offer and have them start, you think it’s over and you can now train that person to perform their duties. Thank goodness, you think – but in walks a different person then the one you interviewed prior to their start date. I believe that the best a person will ever be is in the interview. It’s the first date, it’s where everything you want to hear is said, it’s a person on their best behavior. After a few short weeks is when you will start to see the real person start to come through. We hope this person will be similar to the one we interviewed, but anyone who has been in management for even a short time has seen how likely it can be to go the other way. The employee who begins coming in late regularly, searching their email or Facebook account while at work, not being enthusiastic or friendly with your staff; It’s this person that makes you consider your options and make the decision to live with what you have or start the above process all over again. The question I have is this, how much money did you lose in soft dollars going through this process?
This question is probably the main question you should ask yourself prior to running that first ad. A professional employer can help you eliminate these soft dollar losses and allow you to focus on what you do best and generate revenue while we focus on your employment needs. Yes, there is a cost to using our services, however the long term savings and increase in hard dollar billing will more than offset those costs – not to mention assist you with employee retention through elimination of employee burnout.
Written by: John Dalton