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The Road to Financial Freedom

Employee financial wellness can affect your bottom line – are you on top of it?

Nadine Todd

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“From a business threat perspective, financial distress amongst employees can lead to absenteeism, theft, fraud, corruption and ‘presenteeism’ which is when an employee is at work, but completely unproductive, either because they’re using work time to find another job or make extra money, or because they are so stressed about their financial situation that they are completely unproductive,” explains Nigel Willmott, founder of financial wellness company, Motivate Today.

He has five points that every business owner can follow to mitigate the risks associated with this problem.

  1. Make sure you include a credit check in your hiring process. Try to avoid hiring financially distressed individuals where possible. There will be associated issues with such an employee that will impact your business.
  2. Understand what’s happening with your employees. Don’t turn a blind eye to the financial issues they might be having. “This doesn’t mean you should necessarily lend employees money or give them salary advances,” says Willmott. “That can often lead to far greater problems, and it’s not solving the root issue. Instead, education will help your employees take control of their finances themselves, but the first step is recognising that your company as a whole will benefit from a financially well workforce, from upper management right down to wage earners.”
  3. Implement an employee assistance programme. “The best way to handle financial distress – even for law risk employees – is financial education. Start small. Get each employee to work out their income to debt ratio, their net worth, find out if they run a budget and if they’ve accessed a free credit report in the last year. This allows them to evaluate whether they are high, medium or low risk, and to start the path of determining shortfalls.”
  4. Encourage a shift in thinking. South Africa has R1,5 trillion in household debt, largely because our society so easily survives on credit. In most cases through developing the right attitude towards money, implementing a budget and changing the way we view debt, this can be taken under control. “Within one to two years any business can take its workforce from financially distressed to financially free, simply by assisting employees to plan their finances, manage expenditure versus income, limit credit dependency and encourage a culture of saving,” says Willmott.
  5. Follow through. This isn’t a once off. It’s a continuous process that helps people take control of their finances. Don’t make assumptions about who is and isn’t financially distressed in your workplace. Instead, foster a system that allows people to openly evaluate their spending habits (albeit confidentially in terms of figures), and help them put a system in place that demands accountability of actions, but is also supported by the business as a whole. Make it clear that what happens to your employees outside the workplace concerns you. EM

The myth

“If you paid me more, I’d be financially free.”

The reality

Simply earning a higher salary will in most cases not solve a severe debt situation. Financial freedom is not about how much money an individual earns. It’s about how much they have left at the end of the month. And when there isn’t enough left, and that individual has serious money and debt issues, the ramifications will very quickly spread to the workplace.

Connect: www.motivatetoday.co.za

Getting it right

Willmott offers a range of assistance programmes from one day interventions to a comprehensive eight-month programme.

“These are designed to be short, minimally invasive sessions held on a monthly basis that don’t affect business output and are affordable for all business owners.”

“I’ve never met a business owner who doesn’t know that at least some of their employees are in financial distress. In some cases they offer loans, in others they ignore the fact or believe it doesn’t concern them; in most cases, the results of financial distress, like theft, fraud and absenteeism are dealt with, but not the root cause.

“Financial freedom starts with education. If you can get that right within your organisation, many other bottom line issues will naturally be rectified, and you’ll have a happier, less stressed workforce.”

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The Best From the Rest: How important are your employees to you and do they know? Change it here.

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Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Managing Staff

What To Include In Your Induction Training

Induction training ensures that new workers adopt good working habits, helps them to feel as though they are part of your company and alerts them to the expectations that your company has for employees.

Amy Galbraith

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Introducing new employees to your company and your processes is a vital part of hiring new talent. You will need to teach them about any administrative processes that will happen during their onboarding period, as well as show them the ropes of their new position.

This is known as induction training, and is of vital importance to any new employee who enters your company. Induction training ensures that new workers adopt good working habits, helps them to feel as though they are part of your company and alerts them to the expectations that your company has for employees.

The description and expectations of the role

This is one of the most important parts of your induction training and should be the first step you take for your new employees. This should start as soon as they have accepted their role, as it will make the onboarding process easier and more efficient.

You will need to send them an offer letter, two copies of the contract (one for them to sign and one for them to keep), details of all benefits and a copy of the employee handbook. On their first day in the office, you should describe their new role to them in detail as well as how they are expected to perform. By taking this simple step, you are preparing your employees for the rest of their time at your company.

Related: As An Entrepreneur, Be A Motivational Leader To Your Staff

Health and safety in the workplace

You are legally required to provide your employees with any health and safety information they need to carry out their roles. You will need to provide them with a copy of the company’s health and safety policy. And ensure that they sign it once they have read over it and understood it.

You must inform all new workers of the fire safety procedures and tell them what to do if the alarm should sound.  Health and safety in the workplace also involves your policies on using the kitchen in your office, so be sure to show them the kitchen and educate them on any rules you might have.

Tour the premises

It is important that your employees know the layout of the inside and outside of your office, especially if an emergency should occur. It is also helpful for them to know where the kitchen and restrooms are.

A tour of the premises will also allow new employees to familiarise themselves with the different departments. If they need to speak to the client services department, they will know exactly where to go rather than having to wander the halls lost. While this might not seem to be a vital part of induction training, it is helpful in making your employee feel welcomed and accepted in the company.

Introduction to their colleagues

Introducing new workers to their colleagues is an important part of induction training. You should start by introducing them to their line managers, the HR department, the health and safety officers and the employee representatives.

Meeting their line manager first will allow your new employee to get a feel for the role and get to know who they will be reporting to. It can make first days less stressful and maintain a friendly office atmosphere. Have a moment during your morning discussions to introduce your new employee to the rest of their colleagues, but be sure that they are okay with you doing this beforehand.

Related: What must I include in an orientation pack for new staff?

Provide ample orientation

The orientation period of the training should not be forgotten, nor should it be lackadaisical. You will need to include an introduction to the processes of logging on to computers, where to find stationery supplies, and the policy on use of phones during working hours.

Show your new employee how to turn on and log into their new computer, including how to access folders, emails and the company’s drive. It might be a good idea to assign a “work buddy” to your employee to help them with any new tasks at first. Providing ample orientation will make the transitioning process easier for your employees, but be sure to have regular catch up meetings during their first three months to see how they are handling the position.

Induction training is important

If you own a fast-paced company, you might not think that induction training is very important. However, nothing could be further from the truth. Induction training is immensely helpful for new employees, just as courses for team leaders are for more established employees.

You will need to provide a thorough description of their role, explain the health and safety procedures of your office and introduce new employees to the rest of the office on the first day. From here, you should have regular checkups during their first three months to ascertain their progress.

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Managing Staff

Employees Underperforming? How To Respond To These 3 Excuses

Sometimes, an employee just needs an extra jolt. Other times, you will need to pull the plug.

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Companies are increasing their focus on employee retention. In fact, PayScale’s 2018 Compensation Best Practices report found that 59 percent of respondents considered employee retention a “major concern” for their companies and organisations. This isn’t surprising given that a revolving staff door can make it almost impossible to preserve recent organisational knowledge and keep up with projects and responsibilities.

So, yes, keeping retention top of mind is smart, but sometimes a staff change is unavoidable. When you’re calling the shots, firing people will almost certainly make you uncomfortable. Whether you are running a small start-up or a Fortune 500, you can’t hide behind other people and say the decision was out of your hands.

Then, the bigger your company gets, the harder it will be to respond in order to change quickly and effectively. While employees can grow into their roles, you shouldn’t let your sense of loyalty to your current employees prevent you from making good business decisions.

It’s just logical that some of your original staff members are going to be unable to keep up with the pace and to cease to bring enough value to the company. In those cases, you should maintain a realistic attitude as to when it is time to part ways. And, when those tough conversations need to happen, your sense of loyalty to your employees can be your worst enemy.

A retention reality check

checking-in

In your personal life, “loyalty” generally means believing in an individual and defending him or her when that person comes under attack. When you become part of a team, however, the definition of loyalty changes.

As a leader, you need to think about your loyalty to all of your employees instead of just one person. When a team member cannot keep up or shows signs of burnout, he or she will likely require co-workers to pick up the slack. When you hold certain people to a lower standard, other employees become resentful, and the poor performer starts to drag the company down.

Related: Dealing With Employee Misconduct

For example, a B2B company we worked with had a marketing employee who had been with the team from the beginning. The company had done well, and its board was pushing for accelerated growth – which required more effective marketing. The employee was a jack-of-all-trades but couldn’t keep up with increased demand. After the difficult decision was made to replace this employee with a more qualified individual, the company quickly hit stretch goals that had previously been elusive.

Often, a leader may be blind to necessary personnel changes, whether willfully or unconsciously. In either case – if this leader is you – the sooner you recognise the problem and take steps to address it, the better off your company will be.

Warning signs that signal a personnel change

It will not always be obvious, but here are three common excuses from employees that might indicate it is time for you to consider a personnel change:

1. “I don’t have enough time” 

Work stress is prevalent across all industries, and a study from Paychex found that roughly 70 percent of those surveyed reported stress levels of at least 3 on a scale of 1 to 5. Certainly, being pressed for time doesn’t help stress, either.

One of your primary roles as a leader is to clearly define your employees’ jobs and responsibilities. If team members struggle to keep up with their workloads, they are probably stretching themselves thin trying to help others, or putting off work to avoid accountability.

When you talk to an employee who claims to be short on time, determine what his or her current projects are and then contain them. Give this employee specific responsibilities that don’t require relying on co-workers, and see how he or she meets these new expectations and goals. If the employee continues to underperform, look for a replacement, although it is not a bad idea to put out feelers for that replacement before you even have the above discussion.

Related: Richard Branson on How to Train Your Employees

2. “I cannot control this”

The ability to find a solution to a work problem is an indicator of someone who “owns” the situation. This is a characteristic you need to see in employees. When I worked at Dell, we had a substantial drop in traffic and couldn’t figure out why. Eventually, we discovered that our laptop batteries were catching fire. Unfortunately, you can’t advertise or email your way out of a drop in traffic due to a problem like that; but you can turn to your partners in crisis communication and social media.

If you give employees all the tools necessary to solve problems and they still can’t succeed, it’s time to reevaluate their fit in the company. By letting them go, you ultimately keep them from stagnating. If you struggle with this concept, look toward Startups.co CEO Wil Schroter, who has said he views his company as a school for employees. When employees get to the point that they would learn better elsewhere, it is time for them to move on.

When you let go one of these employees, make sure that the high performers you do have feel appreciated. Talk to their co-workers to ensure that in the interim, everyone’s roles and responsibilities are firmly established. Also, involve the rest of your employees in the subsequent hiring process so they have some control over who is named as the replacement.

3. “It wasn’t me” 

According to Gallup’s State of the Global Workplace report, worldwide employee engagement sits at a lowly 15 percent. Employees with low engagement often have a decreased sense of responsibility for their work, which wreaks havoc on productivity and accountability.

The most toxic situation is when employees attempt to deflect their own poor performance onto surrounding team members. These individuals rarely admit fault but instead cast broad accusations in an attempt to throw co-workers under the bus. As a last-ditch effort, such employees will even question the data that illuminates their underperformance.

Tough love is the solution here. Like an unfaithful partner who’d rather talk about other people who cheat instead of his own indiscretions, the underperforming employee will try to direct the conversation away from his or her performance. But don’t let that happen: Stay the course and let this employee go.

Related: 7 Signs You Have A Positioning Problem [And Why Familiarity Kills Businesses]

Then, during your subsequent hiring process, be mindful of the departed employee’s character flaw. Ask questions about challenges each candidate faced at previous jobs. Be wary when interviewees shift blame to others or speak poorly about their previous employers.

Most importantly, be realistic about your employees and do your best to fill any gaps with the strongest candidates you can find. And accept the truth: You will never be entirely comfortable about firing people.

If you are, you might not have the empathy required to make a great leader. However, it is part of your job to ensure that your seats are filled with top talent, so be loyal to your whole team and know when to let under-performers go.

This article was originally posted here on Entrepreneur.com.

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Managing Staff

An Excellence Approach To Nurture Star Performers

Talent management is the commitment to continuously nurture and align individual attitude and performance, job requirements and organisational culture through excellent performance management.

Adri Dörnbrack

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1. An excellent view of Talent Management

Any sports team needs to measure the vital statistics and performance of each member. “Metrics” like cadence, heart rate, output ratios etc. are important, for the whole to eventually be greater than the sum of its parts.

Similarly, leaders need to measure (without micro managing) employee performance to get a better understanding of what makes the individual stand out. Leaders need to understand how to adapt environments so that everyone can be exceptional.

Not creating a culture of unhealthy competition, but one where every individual’s contribution is understood and valued, and individual work experience is adjusted to accommodate uniqueness, will keep individuals performing at their peak, while enjoying what they do and understanding the purpose of their work.

2. Nurturing star performers

Employees should be given the best possible opportunity to serve in a work context that is optimal for their skillset and temperament. Talent management is based on the organisation’s commitment to surround all employees with people, practices and processes that will grow them to their full potential.

From a deep understanding of the talent pool a business can distinguish between top, great, good and poor performers. Having a suitable and fair measurement tool in place is critical in this regard. This allows management to clearly understand why people are in different performance categories, and provides insights on what pro-active actions can be taken to develop people into their full capacity.

People are highly influenced by work-related relational contexts and environments. Poor performers can become top performers when there are leadership changes or job changes that simply fit better, but also vice versa. Top performers can become poor performers due to illness or other job related changes. There have also been cases where top industry performers join a different organisation and then struggle to perform due to the individual not aligning with the new organisational culture.

Related: These 4 Types Of ‘Nightmare Managers’ Are Scaring Employees Away

Excellent talent management considers all of these factors:

  • Understand who the star performers are, and why they are viewed as top performers. (Know and acknowledge what they contribute in terms of both job deliverables and attitude).
  • Understand the relationship between the top performer and their leader.
  • Understand the culture of the department and why this fit works for this individual.
  • Then, for the future of work: Consider adapting working conditions or terms of employment in order to keep the star performers (Eg. Flexible working hours, virtual offices, or shorter terms of employment to ensure growth opportunities.)

The biggest contributing factor to ensure excellent talent management is to continuously understand and communicate what is expected from an individual, to have measures in place to know if the individual achieves this, to know what value this adds to the business – and then making sure that they are compensated accordingly.

3. What star performers desire from corporate culture

People don’t want to work merely for personal gain. They want to connect and contribute to a business that shares their values and contributes towards the development of a healthy world and better society.

Spiritual intelligence is becoming increasingly important. This trumps mere personal self-actualisation, and entails feeling connected to a business that has a bigger shared purpose than just making a profit.

People want to connect with businesses that have integrity, moral leaders, and feel part of a network that are responsible stewards, who will value their total personal contribution and help them grow as star top performers within a star team.

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