Any good entrepreneur or manager knows that having a great team of people working for you is the key to succeeding in your business. Great employees are a huge expense, however, and entrepreneurs need to always be vigilant about keeping costs in check, so here are some tips for controlling payroll costs without screwing your employees.
Firstly, consider hiring teleworkers and/or allowing your current employees to work remotely. If you’re in an expensive location like New York City, having the flexibility to hire someone in a less expensive locale could allow you to get top notch talent for a lower price simply because the cost of living and average salaries are lower in some parts of the country or the world as compared to others. That programmer from Missouri may be just as talented as the one in Greenwich Village, but is probably quite a bit less expensive.
Secondly, if you provide a kick-ass work environment and non-cash perks to your employees, they’ll probably be a little more forgiving when you can’t offer huge raises or bonuses every year. Really listen to your employees and try to get creative about offering the perks that they want and keeping salaries in line with what your small operation can handle.
Along those same lines, offer your employees great opportunities for training and development. Helping someone pay for a part-time MBA program, for example, and being flexible about letting them leave early once a week to get to class is much less expensive than a hefty salary hike, but the benefits are clear to the employee and s/he will be less inclined to make a fuss about salary when they see the future benefits they’ll reap by sticking around. For some tips on creating great employee training and development programs without breaking the bank, see my post here.
Finally, make sure that you’ve taken a hard look at your operations and that everyone working for you is really necessary. This isn’t to say you should go out of your way to fire people, but it’s often in the best interest of your company’s bottom line to give each employee a bit more responsibility and a bit more salary as opposed to hiring another employee. If you have shift workers, take a look at traffic vs. shift hours and make sure you don’t have more people than necessary scheduled at once.
Employees are always going to be a major cost to any business but, if you manage them intelligently, you can keep a great team happy without over-spending.
Now I’d like to hear from you: What tips can you share for keeping personnel costs down while still having a great team and keeping your business flowing smoothly? Let me know in the comments below.
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