Forget the “New Normal,” are you prepared for the New Workforce in 2021?
It’s January 1, 2021 and we are in a New Year. We now have the Covid vaccine. We have new hope for our country, our economy, and our future. We are ready to get back to normal activity. And, we have a new round of governmental stimulus to help workers and employers pay their bills. But do we really believe that we will return to “normal” routines?
There are clear indications that our future will be very different as we start to rebuild our economy. Let’s take a look at one scenario and let me know at Richard@ramcpa.com if this is your future path.
Spoiler Alert: This article is a little long, so here is the short version of the rest of details that follow.
- Companies will transition away from fulltime, onsite staff, except for a small group of core employees. These onsite workers will focus on routine activities that involve outside visitors or assisting with periodic group meetings.
- To compensate for the limited on-site staffing, businesses will shift many in-house duties to projects. For example, web support, sales, accounting, payroll, and IT Support can be performed by hiring independent contractors or by hiring remote workers who are paid on either a project basis or commission basis (instead of an hourly rate).
- Many businesses will fail because they cannot reduce overhead costs or because they do not shift their management style to focus on goals instead of productivity (which are very different targets).
Have I grabbed your interest so far? You can call us today at (504) 780-9091 to discuss how these transformations can make your company more profitable. Now for the details and the proof.
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Today, many workers are either furloughed (yes, laid off is more accurate) or work from home. If this trend continues, there will be a huge supply of available office and retail space in all major cities. Many companies are locked into 5 or 10 year leases, so any unused office space will be a financial problem for many years.
Schools are closed every week in one town or another and children are forced to attend class remotely. Teachers are trying to build classroom engagement, but the downward trend of student grades shows that current efforts are unsuccessful. This example shows the limitations of remote worker productivity.
Retail shops are open, but many stores are located in areas where the number of shoppers is limited to 25% – 50% of capacity. To ensure compliance, management must assign one employee to “guard the door” as shoppers visit. These sentries test the temperature of incoming shoppers (high fever is a sign of Covid infection) and limit the number of shoppers to a government-mandated maximum number. Excess shoppers are forced to stand in a line outside of the shop until a previous customer leaves the store to free up a coveted shopping slot. This is an extra cost that does not add value to the shoppers or add income to the store.
The list of challenges seems endless as we can site modifications to hospital procedures, entertainment venues, sports games, religious events, and vacation travel. So, what does our future hold?
We know that the Covid-19 lockdowns eventually will be lifted. We do not know when or how the lockdowns will be removed. But history shows us that any major disruption leads to permanent change. If the change is slight, we call that a transition. When the change is significant, we call this a transformation. Due to extreme impact of the Covid-19 lockdowns, we will have a transformation across our country.
This transformation will change the way we gather in public, worship, enjoy entertainment events, and learn in academic settings. It will change the way we network with colleagues, attend seminars and conventions, and hire workers. And, it will change the culture of our companies by shifting away from personal fulfillment (career paths, job enrichment, leadership training, etc.) and move to align worker activity with measured goals.
Most importantly, the pandemic has changed our customer’s perception of the value that we bring to the marketplace. Customers has less wealth after the pandemic has ended so their priorities have shifted. Less income leads to a change in the choices we make when buying products and services. As a result, if we do not change our company operations to meet the new expectation of workers, customers, and vendors, then the value of our company will diminish in the eyes of our customers.
The transformation that will occur as a result of the Covid-19 shut down will uncover many corporate deficiencies that have been allowed to exist by dysfunctional managers, excess staffing, and frustrated owners and investors.
If you disagree with this assessment, then you should be able to prove objectively that your recent investment in training has had a measurable improvement in your company’s operations. Keep in mind that the following statements are not objective measurements:
- I feel like the last trainer made a difference with our staff.
- I see results each time we hold a training session.
- Our workers are happy to attend training class and learn easier ways to complete their tasks.
By contrast, examples of objective measures are:
- Our profit line increased 10% as a result of the changes we learned from our last trainer.
- By adding a weekend shift, our overtime hours have dropped by 15%, saving the production facility over $108,000 per year. This has also allowed us to offer flextime for all production employees and reduced turnover by 50%.
- We have seen a 20% increase in high-value product sales since we began bundling premium-priced products with accessories to provide an all-inclusive customer solution.
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So, how do we transform our companies to this “New Normal?” First, we need to take a fresh look at the role of supervisors and/or managers in our workforce.
Under a typical organizational chart, staff report to Supervisors, who report to Managers, who report to Vice Presidents, who report to the President. That translates into many layers of unaccountable effort. Sure, the large companies uses budgets, goals, and staff evaluations. But we know that these tools very rarely measure the performance of the individual employee. Even in smaller companies, the Owner rarely knows the amount of profit that can be attributable to any specific worker.
We can improve our success if we are committed to transforming our corporate culture starting today. The Covid-19 shut down period is the perfect opportunity to implement change because our fate is gloomy if we do not shift away from dysfunctional management styles.
We use the term dysfunctional management style because the style used by most Managers today does not fit the definition of management. Consider this:
Management is the science and art of getting people together to accomplish desired goals and objectives by coordinating and integrating all available resources efficiently and effectively.
So, ask yourself two questions: Prior to the Covid-19 pandemic, was your company operating efficiently or effectively? Were you able to achieve at least 60% of your measurable goals in each of the prior 2 years?
If you answered YES to these questions, congratulations. You are ahead of all of your peers in your industry. If the answer is NO, then are you willing to improve? If not, then you are relegated to diminished profit as your peers transform to meet the limits and the opportunities of tomorrow’s business environment.
If you are ready to transform your company to meet the needs of your customers in the future, then now is a great time for you to take a break and give us a call at (504) 780-9091. We will answer your questions and discuss your specific needs at no cost and with no commitment during this call.
To end this article, let’s take a look at some of the steps you can take to transform your company into profitable operations for 2021.
- Re-focus your management style to track goals and measurable objectives that lead to profit. All other considerations are secondary. This probably will require the assistance of outside consultants and trainers.
- Review all jobs, daily operations, and activities performed in your company. Separate the activities into three areas:
- Daily or recurring activities
- Unique or one-time projects
- Cyclical or scheduled activities (year-end 1099 preparation, technology upgrades, back-to-school advertisements, etc.)
Work with your accountant or trusted business advisor to uncover additional areas that you may have missed. Don’t have a Trust Business Advisor? Give us a call at (504) 780-9091. As a public accounting and consulting firm, this is a traditional service we offer have been offering for over 30 years.
- Hire Independent Contractors when possible for one-time projects and cyclical activities. Develop a minimum base-pay for in-house staff and pay an additional project-fee for completed projects assigned to the individual if contractors are not available.
- Re-define recurring tasks so that measurable results can be tracked as the work is performed. Establish bonus pay for high performers.
- For on-site staff, assign a range of tasks for these employees to ensure that their time contributes to the profit goals of the company. For example, receptionists can call “lost customers” with a script that is intended to encourage these customers to begin buying your products again. Create an “Idea Jar” for production workers to leave ideas for improved productivity. Employees are rewarded with a percentage of the related increase in profit for six months when their ideas are implemented.
These ideas are not simple or easy to implement. But the rewards far outweigh the effort once transformation is achieved. Larger companies will have a more difficult time introducing change, and these companies should obtain assistance from an outside firm that brings the skill, experience, and authority that comes from being an “Expert Facilitator.”
For smaller companies, the owner probably will be involved directly. However, the owner’s time is limited, so having an outside consultant available throughout this process may be necessary.
This was a long article, but there was a lot to unpack. If you would like to know how these concepts can be implemented within your company, give us a call today at (504) 780-9091. Or send us an e-mail at Richard@ramcpa.com We never charge a fee without your prior approval. All discussions are confidential, so there is no risk to contact us today to find out how you can be profitable in 2021.