The cost of living crisis has seen consumer spending drop as a result of high bill prices. This increased financial pressure is having an impact on businesses and subsequently the businesses who supply them. We are at a point where efficiency can be the difference between survival and death, which means you need to keep your small business as lean as possible.
The trick isn’t just survival, it’s about trying to position yourself in a way that allows you take advantage of the period of growth that often follows times like these. We’re here to help you understand how you stay agile and navigate towards that brighter future.
Be smart with staffing
Staffing can be a huge cost which is why it’s important to understand your company’s needs. If you have varying staff needs at different times of the year (or different days of the week), try to make sure you optimise your staff rotas. There are a lot of people who may be open to part-time work and this could give the extra flexibility you need to keep your costs down. However, keep in mind that you want to keep your core team happy by providing them with enough work.
It’s worth considering remote workers as, depending on the nature of the business, you might be able to hire people from elsewhere in the country and pay a lower wage for a great employee. Hybrid and remote working can also be a good way allow your team to save money on their commute. Be sure to take advantage of the technology available so that your team can work just as effectively remotely.
Use automation to your advantage
AI is starting to become useful, though it is still early days. But there is lots of more established software which can make a huge boost to your efficiency and slash hours of work off your task lists. Reviewing your processes will allow you to see where time-saving technology can be implemented. You could find new software tools that save you enough time to operate with fewer staff, or reduced hours. However, even if you want to keep your team at the current size, it’s still important to make the most of automation as this can help build your capacity for growth. For example, many of our customers have told us that switching to our Payroll software has saved them a lot of money in comparison to what they were spending before. Small changes like this can really help your business cut back on wasting time and resources, which will give you more stability in the uncertain climate.
Retention is vital
Your people are critical to the success of your business. You need to be able to lean on your team to look after your customers properly… but recruiting and training staff to get them to becoming people you can rely on takes time and money. So, once you’ve done that it’s important to hang on to that knowledge and expertise. When considering how to trim your costs, make sure you hang on to the core established team members you’ll regret not having when the economy starts to grow again. Large companies often cut deeply going into a tough economy, and then struggle without enough experienced staff on the way out. Learn from their pain!
To boost retention, consider keeping wage rises modest but offer bonuses to staff based on your success, so that you keep them with you, and they can share in your success. This will help keep your fixed costs as low as possible and align the team’s interests with yours.
If you do need to trim your team, make sure you follow a fair redundancy process apply just and fair criteria that genuinely suits your businesses needs of the next two years. This means that when you emerge from the tough times your team will be in the right shape and poised for growth.
Keep your team happy
To retain your team, you’ll need to make sure your people are happy. It’s easy for even small businesses to find out how their staff are really feeling using staff survey software. These surveys can be anonymous to encourage honest answers. It’s crucial to then act on the points raised—even if that means explaining why you can’t do something. You’ll probably find a number of things you can do that will be cheap or free but boost the team morale.
One smart benefit we’ve seen customers start to offer is a salary sacrifice scheme which staff can use to buy groceries. Schemes like these can save your staff 6% or more on their groceries without costing your company as much – a great win-win.
We know the challenges that you face at the moment, but we’re confident that better times are coming. If you can adapt your business to the climate and really focus on getting your staffing correct, then your lean business model puts you in a perfect position to grow when the economy does. We hope these tips help you to be that little bit more efficient.
This article comes courtesy of citrus HR, the small business HR and payroll experts.
