We’ve been inundated with various headlines regarding the Great Resignation. And while they all have different perspectives, one commonality exists – the value placed on employee experience. Employees are making it very clear that while money is important, it isn’t everything. They want to be valued and appreciated, and find meaning in their work and in those with whom they collaborate.
According to a recent Gallup survey, the percentage of engaged workers declined in 2021 for the first year in more than a decade, in large part because organizations have forgotten about the basics. “Among the engagement elements Gallup measures, the greatest declines were in clarity of expectations, having the right materials and equipment, and the opportunity for workers to do what they do best. These elements are foundational to employee engagement.”
For employers, prioritizing the employee experience has arguably never been as important as it is right now.
What Exactly is Employee Experience?
Think of the employee experience as a journey that includes every interaction and observation during an employee’s lifecycle with your company — from recruitment and onboarding to development and retention to exit. It encompasses all that they encounter and observe during that lifecycle, including their role, workspace, leader, team, and company culture. At their foundation, employee experiences should be aligned with the company’s purpose, values, and mission, and have the full support of leadership at every level.
Why Should You Care?
I don’t know of any leader who would object to decreased absenteeism, low turnover rates, or increased productivity. And these are all very valid reasons that every leader should care about employee experience. In fact, it should be given the same time, attention, and resources as launching a new product or service.
An enhanced employee experience results in increased engagement, a stronger company culture and brand, growth, and better customer service. Think of it this way – your employees are on the frontlines of customer experience, helping to build and represent your brand. And whether they have a positive or negative experience at work each day will invariably impact these crucial relationships, and by extension, your company.
Additionally, as we discussed in At the Intersection of the Great Resignation, Professional Services, and Those Who Stayed, the employees who did not join the Great Resignation are burnt out and often feel underappreciated. These employees, who have more leverage than ever before, could still choose to leave in search of something better, and that often means a better employee experience. However, if their leaders are proactive and look at this instead as an opportunity to enhance employee experience before it’s too late, those employees are more likely to stay. Simply, companies who place value on employee experience have a significant competitive advantage over others who don’t.
New Year; New Budget Maintaining Control Over the Organization’s Finances
It’s January. Your new calendar is in place. There is a renewed sense of energy among the team. A fresh start for your business awaits. Your organization has its yearly goals (or you are in the process of developing them), and it appears to be full speed ahead. Yet, as always, with wide open space in front of us, there’s only one way to effectively move forward – stop and develop a well-thought-out plan. And, in this case, a major part of that plan is the annual budget.
Budget Benefits An annual budget provides benefits that reach far beyond year end. Budgets clarify your goals, provide an accurate picture of what you can afford (and what you can’t), increase creativity (by helping you think outside of the box when it comes to funding sources), help you to avoid surprises, and fulfill some stringent requirements (budgets are needed for funding and become the basis for quarterly financial statements).
Accurate, up-to-date annual budgets not only help organizations maintain control over their finances throughout the year, but also demonstrate to funders exactly how their money is being utilized. They provide an opportunity to view any gaps in funding and what is needed to close those gaps. They also decrease the likelihood of overspending by keeping you and other stakeholders accountable.
Budget Basics While one organization’s budget may be different than another’s, there are common factors included in them all – what we like to call the “budget basics.” Below are some of those basics, along with tips on how to make the best projections:
Tip 1: Income should be broken down by source. For example, sales of goods or services, subscriptions, grants, contracts, yearly dues or fees (for memberships), rental income (if you have rental property), investment income, and funding from investors.
Tip 2: Start with last year’s figures as a baseline and estimate conservatively. You never want to be overly optimistic when it comes to income. That means staying on the lower end when you make your projections.
Tip 3: Look at who has regularly funded the organization in the past. Have they already promised anything for this year? Is it time to ask?
Tip 4: Analyze whether your funder has restricted the use of funds for a specific activity or item. Build this into the budget to ensure that you adhere to your funder’s restrictions.
Tip 1: Categorize expenses. Look at payroll, rent, consulting service fees, office expenses, transportation, travel, and anything else on which you expect to spend money.
Tip 2: Once again, you should start with last year’s numbers and make conservative projections from there. But instead of staying on the low end, with expenses, you always want to estimate on the high end.
Comparison of Projected Income to Expenses.
If they are approximately equal, your budget is balanced.
Tip: Use the money as you have planned, and do not deviate.
If projected expenses are significantly less than projected income, you have a budget surplus.
Tip: Consider strategies to expand or invest money.
If projected expenses are significantly more than projected income, you have a budget deficit.
Tip: Look for funding sources or find areas to cut expenses.
While your budget will always begin with estimates, it’s imperative to make real-time adjustments as the year progresses. These adjustments should be made monthly to keep the budget as accurate as possible. In fact, by the time you are in the fourth quarter, your adjusted estimates should be very close to your actuals. Additionally, and with particular importance this year, is paying attention to what’s outside of the numbers. With the economy and employment in a state of constant flux, you should anticipate changes in leadership, staffing shortages, product delays, and increasing prices, and their impacts on the budget.
Set yourself up for success in 2022 with an accurate, up-to-date annual budget that you can rely on to get from January to December. After all, it’s difficult to reach any destination without a map.
Barker Associates has extensive experience as an outsourced CFO. If you need assistance with your budget, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.
At the Intersection of the Great Resignation, Professional Services, and Those Who Stayed Shifting Perspective from Those Who Left to Those Who Remain
The Great Resignation of 2021 has left more than vacant seats … although it has left plenty of those too. In its wake are thousands of desperate CEOs and the often forgotten-about, frenzied, and burnt-out workers who chose to stay. In their desperation, what these CEOs aren’t realizing is that while they struggle with finding new talent in this overly saturated candidate market, they are often not paying enough attention to, or completely disregarding, those who are still right in front of them.
These employees, whether they stayed because they had no choice (after all, not everyone can quit), felt a sense of loyalty to the company and/or their co-workers, or simply loved their jobs, are now feeling undervalued and underappreciated at the same time they are working harder than ever. And, while they pick up the slack and feel underappreciated by their supervisors, they are often also dealing with increasingly demanding clients and customers. It’s as if the country is in the grips of a new pandemic of impatience, rudeness, and intolerance, and these employees are left to deal with it all. Additionally, the resulting shift in power and bargaining positions of the Great Resignation have forced companies to offer more money than ever before … to secure new talent. That’s great for them, but what about the others?
As it stands today, in return for all that they’ve done and sacrificed, these employees are getting depressed, having panic attacks, and getting sick, with some turning to alcohol or drugs to try to ease their physical, mental, and emotional exhaustion. With our nation already struggling with massive mental health issues, something must be done to curtail this destructive path.
The Impact to Professional Services
While this challenge has impacted nearly every industry, professional services, including accountants, lawyers, finance, and IT professionals exemplify it even more. The mental and emotional anguish of a professional who is trying to do a good job when it is physically impossible to do so (because they have too much work to do) takes away their ability to think clearly and make quality decisions. All accounting firms – from the Big 4 to regional companies – are short staffed. And the ones who stayed are having to work extra to cover multiple jobs. Despite this dynamic, it seems companies are reluctant to increase their salaries to meet current market demands. According to one recruiter, if you want an accounting professional work in the office, the rate will be 130% of the market because they are demanding to work from home.
Like millions of others, professionals are tired, burnt out, and frustrated. And money isn’t everything. The pandemic shook people to the core – they are looking for more meaning and know that meaning rarely comes in a paycheck. In fact, there are professionals walking out of jobs that pay $250,000 per year because they can no longer cope with the constant stress of doing everyone else’s jobs. That’s a lot of money to walk away from, demonstrating the increasing severity of this situation.
It’s About Retention
It’s incredibly short-sighted to keep working those employees who chose to stay to a breaking point, while keeping them at below market salaries. It’s time for employers to shift some of that focus from securing new talent to securing the talent they already have. If they don’t, they will never find the right balance, as those who chose to stay before will likely soon also leave. According to Harvard Business Review, “employers need to recognize that it takes significantly longer to recruit someone than it does for them to give their two-week notice and depart.”
Increasing retention can come in many forms, including:
Providing opportunities to grow
Elevating the company’s purpose (and communicating it with the team)
Prioritizing culture and connection
Investing in taking care of employees and their families
Further, while we are at a time when there is increasing emphasis on Environmental, Social, and Governance (ESG), we cannot decrease emphasis on the health and welfare of our employees. It is counterintuitive to work on ESG initiatives while the company is short-staffed and burning out the employees they have.
A word of advice …
For Professionals. Know your worth! Do your research and ask for a raise with your current employer or seek a new position in this market to increase your salary.
For CEOs. Retain the talent you already have by treating them well! Pay more attention to the professionals you already have on staff than those you are attempting to get on staff.
The Great Resignation may have been considered empowering for those who were taking a stand, demanding more, and walking out the door. But for those chose to stay, it has been anything but empowering. And the resentment and exhaustion they feel isn’t going away anytime soon. It’s time for decisive action now to retain those who remain.
Barker Associates has extensive experience as an outsourced CFO. If you need assistance, or have any other questions, please click here to schedule a 30-minute consultation at a rate of $100.