2018 was a good year for businesses but will that continue into 2019? According to a thinktank from Enterprise Bank & Trust, businesses are concerned about their ability to retain customers and talent.
Operational efficiency, attracting customers and retaining talent were the concerns for business owners, President of Enterprise Bank & Trust, Jeff Friesen said.
“It was overwhelming,” Friesen said. “[The concerns] weren’t surprising [but] it was kind of surprising to see how many businesses weren’t being proactive to try and alleviate those concerns.”
So, what’s the best way to alleviate stress in coming years?
Strategic planning helps businesses plan for growth, allowing a business owner and their employees to have a realistic vision for the future.
According to Friesen, starting a strategic plan can be overwhelming but business owners just need to ask themselves these questions:
- Have the key decision makers gotten together and mapped out what it is that they need to accomplish in 2019?
- What are some of the things that we haven’t been doing that we need to be doing?
- Have we looked at our compensation structure? Our incentive package?
- Are we being proactive with making sure we’re doing everything we can to make sure we’re treating our employees right? In compensation? In the workplace culture?
- Are we continuing to train up people?
“It really helps businesses stay together longer, it keeps them from having that business divorce because they had a clear path of what direction they wanted to go to,” Friesen said. “You can’t plan for everything, but if you’re not sitting down [and] being strategic about these things that you’re worried about, then you’re just being reactive at that point.”
When planning to gain new customers the business needs to ask itself, “have we adapted with the changes?”
“Buyers today buy completely different than they did ten years ago. Sit down [and] come up with some of those key performance indicators to make sure that when you set what you want to do, that you got quantitative measurements to be able to show you’re accomplishing those things so you can show you’re having success,” Friesen said.
However, the biggest challenge businesses face is attracting and retaining talent.
According to an Aerotek survey, nearly half of human resource professionals cited employee retention/turnover as the top workforce management challenge for the third year in a row.
“Turnover is expensive – it costs employers 33 percent of a worker’s annual salary to hire a replacement if that worker leaves. In dollar figures, the replacement cost is $15,000 per person for an employee earning a median salary of $45,000 a year,” the study said.
The problem is especially big in Arizona, where there are more jobs than people seeking employment.
“Overwhelmingly employers are telling us the biggest issue with continuous growth is lack of employees. These companies’ ability to grow is being curved because of their inability to hire more talent. If [they] can’t get more growth, at the end of the day it’s going to cause a slowdown in the local economy,” Friesen said.
To attract and retain employees, employers must keep in mind the changing demographic of people looking for jobs and rethink the way they compensate.
“Do you understand the demographics of the age group you have working for you? What’s important to them in regards to compensation? Is it money? Vacation? Flexible work hours?” Friesen said. “You’ve got to really understand your employee base. Otherwise, your competitor down the street [that] is doing that [is] going to steal your employees.”
While Arizona’s economy is expected to stay strong in 2019, the concerns surrounding talent retention and inflation continue.
“We are in one of the best job markets in the country. We’re hitting the tops of a lot of lists and what I really like to see is the diversity in industry we have,” Friesen said. “I think we’re in a really good spot. Concerns right now are inflation and finding talent and those are going to continue to be some things that are going to cause some unknowns of whether or not the market will continue to see the success that it saw in 2018.”