Connect with us

Managing Staff

Staff Wise

Create a platform to help employees manage their personal finance.

Bryan Hirsch

Published

on

StaffWise

Andrew Carnegie is quoted as saying: “Take away my people, but leave my factories, and soon grass will grow on the factory floors. Take away my factories, but leave my people, and soon we will have a new and better factory.”

It is important to understand that it is the people in the business who make things happen. In most organisations, the key element to success is the people who work in them. In the past, insufficient importance has been placed on this human factor that can determine the success or failure of a business.

How quickly circumstances in South Africa have changed: High interest rates as a result of high inflation, rising oil prices, disruptions in electricity supply and economic problems in the USA that have resulted in a worldwide credit crunch. The introduction of the National Credit Act in June 2007 to protect consumers has made it more difficult for consumers to borrow.

For these reasons small and large businesses – and individuals – are faced with very different challenges.

In the past, the general attitude was “leave your problems at home when you come to work”. But, businesses are increasingly aware of how difficult this is, and that what happens at ‘home’ or in a personal capacity can so often affect work performance.

Empowering staff with financial knowledge is the best way that employers can ensure full concentration and productivity from employees as they are secure in the knowledge that their financial circumstances are under control.

Can companies assist their employees in becoming more financially organised? Absolutely – by providing a platform to educate and assist staff through this often complicated process.

How to Help Employees

An important starting block is to help your staff understand what it means to be ‘financially organised’.

‘Organised’ people are probably able to provide details about their expenses and, off the top of their heads, particulars about their pension plans and savings accounts. The ‘financially disorganised’ would probably have some difficulty calculating even basic expenses such as the weekly grocery bill, and are more likely to react with a baffled expression if you ask about their pension or insurance plans.

Even with such stark differences between the two categories, creating a financial plan and writing all the details down is the best way to work.

To become ‘financially organised’, employees need to know what their monthly and annual expenses are, and what their bank balance is. Many people who consult financial planners have no idea how much money they have in their bank accounts. Being up to date also requires individuals to become acquainted with the details of their savings and retirement plans, insurance, tax, estate plans and long-term wealth creation investments.

These details are, however, still not enough. It is equally important to understand precisely how these different aspects of each person’s finances correlate with each other. Planning ahead is essential for unexpected developments.

Only when people understand their present and future economic needs, can their financial plan be considered sensible and ‘organised’. Certain factors change all the time. When this happens, all they need to do is revert to the existing plan to determine whether adjustments are necessary.

Financial Plans

A financial plan consists of more than just savings and investments. A significant component of your plan should be insurance, and each employee should know how much is needed to protect their family in the event of their own premature death. The following questions should also be answered:

  • How much will their family need if they have to stop working?
  • Will their pension allow them and their family to live comfortably after they retire?
  • Do they need the extra benefits of insurance?
  • Will there be benefits for their spouse when they are no longer around?
  • It is also important for employees to take care of their long-term welfare. How would they take care of themselves if they fell ill?

High up on the list is for employees to understand the employer’s policies and attitude. Many companies try to abdicate their obligation of continuing to fund medical aid premiums for people who have retired or are close to retiring.

Ensure that employees can see the bigger picture and are not focusing on just one aspect of their plan while neglecting others. Borrowing from financial institutions to meet savings goals is definitely not the right way to go. The interest you are charged is probably far higher than the returns you can achieve. You also need to realise that any investment you make has costs that must be factored into the calculations.

A financial plan is a long-term investment. Putting matters into order and preparing for the future by budgeting well, increasing investment returns, taking insurance or reallocating current assets are key to achieving your financial goals.

The Company’s Role

Companies are seldom qualified to take on the responsibility of dispensing financial advice to their employees. However, they can provide a platform for employees by contracting, at their own cost, independent financial organisations that will provide objective financial services to employees. Costs would range between R1 000 to R3 000 per employee. This is a small price to pay if the employee is going to get complete, independent advice without fear of buying a financial product, as the only way financial planners are rewarded is through commissions on products sold.

The biggest advantage in offering a service like this to one’s employees is that it provides stress relief, freeing employees up to focus on the business at hand and thereby increasing productivity.

BRYAN HIRSCH has been in the financial services industry for 47 years and is a director of Bryan Hirsch Colley & Associates. He has written two books, the first Bryan Hirsch’s Guide to Personal Finance and more recently, Steps to Financial Freedom. Bryan has written for many of South Africa’s top financial and business publications, has been a weekly guest on Radio SAFM for 18 years, and has his own weekly TV show You & Your Money on Summit TV.

Managing Staff

How To Build Better Employee Engagement

Here are my 10 tips for managers wishing to build real engagement.

Dr John Demartini

Published

on

employee-performance-management-advice

Everything begins with values; with the top three highest priorities in an individual’s life. These are the source of that person’s primary purpose and the underlying determinants of their perceptions, decisions and behaviours.

In the context of managers wanting to help their teams to develop mindsets geared towards connection, conversation and experimentation, within a healthy environment, the process must begin with value determination.

Advice for managers

Here are my 10 tips for managers wishing to build real engagement:

  1. Write down the job duties that your people actually have: Their current, accurate, and most up-to-date daily action steps.
  2. Spend some time determining what their values are. You can use the free online tool on my website – www.drdemartini.com
  3. Once you have determined your highest values (the three things that are most important to you in your life, where you demonstrate your greatest discipline, reliability, focus and productivity), you’ll need to find the links between employees’ job duties (Step 1) and their highest values. This is a very specific and detailed step, unpacked below.
  4. The question to ask is, “How specifically will performing this particular job duty help me to fulfill my current top three values?”

EXAMPLE

Let’s say one of your team members is a payroll administrator. Her job duties might include: checking how many hours employees have worked; calculating and issuing pay; deducting tax and other benefits; processing leave and expenses; calculating overtime; answering staff queries; and giving advice.

Let’s presume one of her top three highest-order values is her children. The way to connect what she does with what she values is to ask questions like these, in order to make links and help her see them in context:

  • Does working with numbers help you teach your children to pay attention to detail?
  • Does making calculations help you help your children with homework?
  • Does knowing the art of fair exchange give you a lesson to teach your children?
  • By doing your work, are you earning the income you need to fund your children’s education?
  • If it’s tedious work but you don’t give up, is that good role modelling for your children?
  • Does knowing about money management, and sharing this with your colleagues, help them to help their own children?
  • Does advising others make you better at giving your children counsel?

Related: Why Conflict Resolution Is A Matter Of Matching Values

  1. The magic number to shoot for is 20 links, not seven. Once you get to 20, for some reason, it ‘clicks’ and people can see that what they do every day is (or can be) valuable and meaningful. Be aware that some links are harder to find than others. Some are obvious; some, more tenuous.
  2. Look for fluency. If the employee hesitates or can’t answer the question easily or at all, this is a sign that the job duty is incongruent with their highest values and they are not going to be inspired about that particular duty. (In this case, keep asking them how that specific duty would or could help them to fulfil their highest values, until they can see a connection.)
  3. This is a big job. Value determination and link creation can take a whole day or more, the first time you do it, depending on the size of your team.
  4. To create better connections between your people, use the same process to cross-link others’ three highest values with your three highest values. Go through the entire team, making a list of values across everyone you manage. Look at the common threads. This will help you achieve more equitable leadership, better management and healthier relationships.
  5. For better work conversations, remember that dialogue comes from equal values (or else you simply have alternating monologue). Employees must know each other’s values. You, the manager, must master the skill of communicating your high-priority intentions, expectations and delegations in terms of each employee’s top three values.
  6. Intrinsically, people love solving problems that align with their values, so fulfilling their values will give them the courage to experiment.

Remember: People go to work every day to fulfill themselves, not for the sake of a company. For this reason, managers must enable their people to explicitly connect their own values with their everyday, real-world job duties, so that they become engaged, feel grateful for their collegial support system, and are inspired to go beyond the call of duty and to innovate.

Continue Reading

Managing Staff

6 Ways To Break Bad News To Your Team

We asked six leaders: How did you handle sharing the hardest news of your career?

Entrepreneur

Published

on

bad-news

Being the bearer of bad news is never fun. But there comes a time in everyone’s lives, when they’ve got to step up to the plate. This is especially true in business. When you’re in a leadership position at a company, knowing how to deliver bad news is a crucial skill. To help you out, we asked six leaders for their advice on delivering bad news to teams.

Here’s what they had to say:

1. With a promise

“After the economic meltdown of 2008, we couldn’t afford to keep everyone on staff. Picking who stays and who goes is one of the most difficult decisions you have to make as CEO. I delivered the news with honesty and empathy at an all-hands meeting. We gave some severance, referral to an employment service and a personal reference. We also gave the option to rejoin our team once things were back on track, and some did! It was a homecoming of sorts, a healing moment.” – Ori Eisen, founder and CEO, Trusona 

2. With support

“In 2016, our office manager passed away. She was only 26. We called a mandatory meeting, let everyone know, and brought in grief counselors. The hardest part was controlling my own emotions in front of the company. This was a crucial moment, and the team needed a leader. We organised a memorial service to celebrate her life. It took time for the business to return to a normal cadence, but her impact remains at the company today.” – Rahul Gandhi, co-founder and CEO, MakeSpace

Related: 22 Qualities That Make A Great Leader

3. With transparency

“In New York, construction delays are as common as yellow taxis. But when you’re working to open a new restaurant location and have promoted staff to run it, construction delays don’t impact just revenue but your team’s livelihood as well. Delaying promotions for people who have worked hard to earn them is tough news to deliver. But we invited the team to the construction site to see the space and ask questions, and it helped everyone get on the same page.” – Otto Cedeno, founder, Otto’s Tacos

4. With community

“The worst news my husband and I had to share with our employees, and kids, was that we’d decided to move our business from New York to Los Angeles. We gave employees the option to stay with us and relocate. Some came west, and others did not. We couldn’t guarantee that those who moved with us would love L.A., but we promised to figure it out together.” – Cortney Novogratz, co-founder, The Novogratz

5. With a plan

“One of my first experiences as an entrepreneur was running a restaurant, which I closed as a result of 2008’s downturn. I knew this was going to be life-changing for my team. We did everything we could to ease the disruption, and I leveraged my network to place laid-off employees in new positions – nearly 90 percent had jobs in just a few weeks. As a business owner, failure is hard, but it’s an opportunity to prove yourself as a leader.” – Michael Wystrach, co-founder and CEO, Freshly 

Related: 15 Of South Africa’s Business Leaders’ Best Advice For Your Business

6. With reason

“After I joined Interactions as CEO, my team and I identified significant roadblocks in our product development. We had been on an aggressive growth track, but it was clear we needed to right the ship. I told my board and team that we were shutting down sales to double down on R&D. Hitting pause was an incredibly hard decision, but it was necessary to ensure we were providing the best product and experience for our customers.” – Mike Iacobucci, CEO, Interactions

This article was originally posted here on Entrepreneur.com.

Continue Reading

Managing Staff

Why Small Businesses Are Unable To Pay Staff Salaries

Let’s look at it from a different angle and see if we’ll arrive at that same conclusion.

Matthew Mordi

Published

on

small-business-salaries

We’ve heard countless times the constant conflict between employers and employees over non-payment of salaries. Small business owners complain employees don’t understand what they have to go through to ensure the payment of staff salaries.

The moment they’re unable to meet up with the payment of staff salaries, workers accuse them of being wasteful when business was booming. So the age old story of members of staff not being understanding comes up again. The cost of running the business which includes maintenance of machinery, rents, paying off loans; all these and much more which sums up overhead cost.

While it’s true that overhead cost is usually the main challenge of small businesses, it’s true only in part. Let’s look at it from a different angle and see if we’ll arrive at that same conclusion.

Usually a lot of small business owners don’t save for the rainy day, neither do they invest income generated by the business for the benefit of the business. Personal savings and investment isn’t the same with that of the business. Small business owners tend to save and invest income generated by the business in their personal names.

Related: Start-Up Law:  I’m A Start-up Founder. Can I Pay Employees With Shares?

Let’s look at this scenario:

Mr A. is the owner of a grocery shop. People are patronising the business. Business is booming, everything seems perfect. At this point there is usually no problem paying salaries and overhead. This is the tricky part, what the employer does with the income the business is generating at this point apart from ploughing the money back into the business will decide whether he’ll be able to pay salaries when business is slow.

One would expect the owner of the store to not only save but also invest some of the income made by the business.

This is usually not the case because it’s at this point of booming business and perceived excess cash that the owner remembers he’ll pay himself more than he usually does (and that is if he pays himself salary), needs to move to a bigger apartment or better still, buy a bigger car.

The moment there is downturn in sales as a result low patronage, the problem of payment of staff salary begins. Mr A. makes it clear to his employees that the business isn’t turning in a profit and he’s using his personal money to pay staff salary. Therefore, he can’t keep on doing it and he’ll have to owe salaries.

This could have been avoided.

Do diligent – don’t dilly dally

What happened to the excess profit of years before? It’s obvious the employer hadn’t been diligent with the funds. Instead of investing the money to ensure it generates further income for the benefit of the business for the rainy day, the employer would instead use the profit for his own personal benefit.

If Mr A. had saved the money and income generated by his grocery store in preparation for the rainy day, the company wouldn’t be caught up in the quagmire it was put in.

A business is a separate entity from the founder, whether it’s a small or a large corporation they should stay so; separate. I’m not talking about the technicalities of whether it’s a company or business name. We have to realise that in order for the business to not only survive but also succeed, it must be separate from the owner.

This is one aspect small businesses must learn from large corporations with sound financial plan. There are times these corporations declare losses, yet they’re able to pay salaries! Money made by the business should be for the business. It’s not the time to buy that new car. If employers work with the mindset of paying themselves salaries (not excessive), it would go a long way to ensure the business is afloat even during uncertain economic times.

Related: How To Structure A Fair Salary That Will Motivate Your Sales Team

In fairness, some employers who own small businesses have been exceptional in this regard. However, the fact is, majority of small business owners don’t function with this mindset. Businesses, just like it obtains in our personal lives, have their ups and downs. The things you do or don’t do during the ups are equally as important as what you do during the downs. Save, save and save. You can’t go wrong with this. Invest, invest and invest. You can’t go wrong with this either.

That profit isn’t for spending; at least not yet. Invest the money like you would do with yours. Invest it in the name of the business. Let your business own shares in other businesses. This is sound business practice.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending