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Little-known ways to boost your profits with HR

by Elaine Coe HR Consultant, MAD-HR

Following on from the Prime Minister’s announcement on Monday 22 February, many businesses are now gearing up for re-opening.

This is the perfect time to take a moment and think about your company’s current position. What got you to this point and what is going to help take your business to a whole new level?

Arguably, the most valuable asset of any business is their people. The employees who work within your business are the cogs in the machine that keep your business running on a day-to-day basis. Keeping your employees engaged and happy will drive productivity and profit.

Every business needs to invest in human capital. What is human capital?

Human capital is an intangible asset or quality not listed on a businesses balance sheet. In short, it is the economic value of an employee’s experience and skill. This includes assets like education, training, knowledge, skills, health and other things employers value, like punctuality, dependability and loyalty.

The concept of human capital recognises that not all labour is equal. But employers can improve the quality of that capital by investing in employees – the education, the experience and abilities of employees all have economic value for employers.

Since human capital is based on the investment in employee skills and knowledge through training, these investments in human capital can be easily measured. As an employer you can calculate the total profits made before and after any investment, and any return on investment (ROI) of human capital can be calculated by dividing the business’ total profits by its overall investment in its people.

Hiring the right people is the number one strategy to drive profits for your business, but success is more than that. After you hire the right people, you need to keep them, and this requires an HR plan. Making a plan that focuses on human capital is something you should have at the top of your agenda. The plan needs to include putting the right people in the right positions. The vision, value and goals of the business should be communicated regularly to the employees. Celebrate success as a whole business; identify the business drivers to create the strategic plan; devise the leadership principles; and set accountability measures.

HR has never been more uniquely situated and placed than right now, in terms of helping businesses achieve bottom line results.

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“When done well, measures that utilise technology to bring efficiency to administrative processes have the potential to reduce costs on average by 30 percent” – Brian Lowenthall, Director of Hackett Benchmarking and Research.

There are effective ways that HR can build value. These value-adding efforts go by various names including: Transformational HR, Strategic HR and Culture Support. They all in essence refer to the same thing, the ability for HR to select and retain the right employees and help them do their best work. This is where real profit gains are to be found.

More HR strategies that can increase profit for your business:

Training and development – employees want to develop within your business and develop their skill sets. Offer them opportunities to become better and more productive.

Reward programmes – Give your employees an incentive to do a better job. Reward them for their hard work. Recognise their accomplishments and let them know they are valuable.

Open communications – Promote a working environment which encourages open discussions. Honesty is the best policy and feedback is valued.

Goal setting – Create SMART goals: Specific, Measurable, Achievable, Realistic, Targets, which are common goals for employees to achieve.

Mentors – Create a mentorship programme where new employees can embrace the culture and the knowledge of your experienced employees.

Flexibility – Telecommuting, virtual working, flexible schedules and work life balance are important to your employees. By being flexible your employees will ultimately work harder for you.

Compensation packages – Money, perks and benefits are important to every employee. What does yours currently look like? Can it be improved?

Team building – Individuals are great, but teams will make your business successful. Build a team that works together and wins together.

Tools to do the Job – Give your employees the right tools to do the best job possible.

Company culture – Take time to create the right business culture, a positive and open honest culture, that attracts the right type of people. It makes a difference.

Values – What are your values as a business. Do you believe in honesty and integrity, fairness, trustworthiness, customer experience and accountability? Your values are what you represent as a business.

Recruitment – Know your current employees’ strengths and weaknesses. Establish what type of person you are looking for to balance the skills and personalities of your team to make it stronger and more productive.

When you have all these elements in place your business will be stronger. Your employees will be brand promoters, who will drive your products or services to make your business a great success.

Even though HR may not immediately show profit for your business, it is most certainly directly responsible for increasing your profit. Invest in good HR now to increase profit for your business. MAD-HR are here to help you and your business with any of the above mentioned. We are a bespoke HR Consultancy who work shoulder to shoulder with you to really make a difference.

If you would like to discuss how we can Make A Difference to your business through our provision of HR services, please get in touch on 01473 360160 or visit our contact page here.

You can view this original article and other content at Mad-hr.co.uk

The difference between constructive dismissal and unfair dismissal

by Lesley Bond HR Consultant, MAD-HR

What is the difference between constructive dismissal and unfair dismissal? And why should employers care?

As leaders and HR practitioners, it is important to understand the difference between constructive dismissal and unfair dismissal, and to also be aware of how to avoid placing the business in a position where it is at risk of such claims.

What is constructive dismissal?

This type of dismissal is when an employee resigns in response to the employer’s conduct, which has made the position untenable. In practical terms this is a resignation, however, in law it could be known as dismissal.

It can be an action or a series of actions, and the behaviour of the employer, that leads to the employee’s resignation; it does not matter if the final act that makes the employee resign is minor. If the action substantiates a pattern of poor conduct by the employer, there is a risk that such action could be classed as constructive dismissal.

Some examples of behaviour and actions that could lead to constructive dismissal are:

  • A forced reduction of salary or threat of reduction
  • Being demoted without good reason or in breach of contract
  • Allegations of poor performance which are unfounded
  • Stress at work not properly addressed
  • Allowing bullying and harassment in the workplace

How can an employer avoid being accused of constructive dismissal?

The art of good employee relations is in communication. Employers need to be confident to have difficult conversations with employees. Employers may need to develop their emotional intelligence and approach employment matters in a planned and structured way.

What skills do employers need to avoid constructive dismissal claims?

Skills required to develop confidence in managing difficult situations and conversations are:

  • high quality questioning skills
  • active listening
  • the ability to give structure feedback
  • the ability to explain the rational relating to any decision

With these skills in place, employers should be equipped to deal with poor performance and restructure conversations, ask key questions associated with employee wellbeing, address matters with employee groups, and more. It is all in the conversation – oh, and don’t forget the process. Process is all about keeping track of documentation so that employers have an audit trail of how they handled the difficult situation. Ultimately, the employer needs to be able to demonstrate that they have behaved reasonably and that there has been no deliberate intention to not abide by the contract of employment.

How to avoid a claim

Employers need to be vigilant. Stay on top of employment contracts, HR policies and terms and conditions; avoid small issues building up; have the conversation.

It is important to investigate complaints when they arise. Use your HR Partner to help you; put fair processes in place; include an equality, diversity and inclusion policy; and make sure you offer training to your managers in the art of good employee practice.

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What is unfair dismissal?

This type of dismissal is when the employer terminates employment outside of one the categories detailed below. Fair termination of employment can be made (subject to the correct process) for the following reasons:

  1. Capability or qualifications
  2. Conduct
  3. Redundancy
  4. Contravening a statute
  5. Failing to make reasonable adjustment for a disability
  6. Forcing employees to work in breach of health and safety rule
  7. Some other substantial reason

To avoid claims of unfair dismissal, employers need to ensure their internal capability or disciplinary processes are followed. Are your processes up to date and fit for purpose? Employers and managers need to understand the difference between an informal and formal conversation – this is key. If employers are not sure at which point informal becomes formal, they should discuss this matter with their HR Partner; they will be able to help business owners and managers alike to understand their responsibilities.

What is fair process?

Following the basic process of investigation, hearing and appeal may be enough to demonstrate fair process. However, the quality of the questioning, listening and understanding within these processes are the real tests of fairness. Also, don’t forget that employers need to ensure that they understand when representation should be offered and what constitutes adequate notice of proceedings. Accurate documentation and, most importantly, an open mind, is essential to avoid unfair dismissal.

Do you and your managers have the skills to manage difficult situations? Is it time to review your policies and train your managers to build that confidence?

If you would like help with building capability within your business and reducing risks, please contact us today and speak to one of our HR experts on 01473 360160.

You can view this original article and other content at Mad-hr.co.uk

Bullying allegations and the burden of proof

by Carole Burman Managing Director, Mad-HR

Long gone are the days when we might have jumped to the assumption that an incident of bullying was the preserve of the playground.

Recent years have seen a huge rise in the number of allegations of bullying in a professional setting, and as we well know from the current news commentary, the matter of bullying can rear its head in landscapes as diverse as the corridors of political power, to none other than the royal household.

While no manager would ever want to find themselves witnessing allegations of this nature ‘on their watch’, it’s worth acknowledging that whether a company is large or small, has staff working alongside each other or remotely, or has an exemplary record for historic employee retention, situations can, and do, arise.

Bullying means different things to different people, so managers should be continually mindful that their employee might feel they have grounds to cite an issue if, for example:

  • They feel disrespected;
  • They consider themselves to have been humiliated; and /or
  • They have been made to feel fearful or sad.

The range of specific allegations could be as broad as being given excessive workloads with unattainable deadlines, to being repeatedly ridiculed, shamed or overlooked.

As a top priority, a manager alerted to a scenario of bullying should immediately jump to thoughts of establishing facts, while remaining fair to all parties.

The goal is to discover whether there is indeed a case to answer, and then following a clear procedure to make sure the matter is documented and fully resolved (in whatever direction).

Speed is absolutely of the essence in the case of any allegation.

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For all concerned, it is right and appropriate that the individuals and organisation will all wish to see matters explored and concluded without delay. The manager will therefore want to ensure that resources allow for this to happen.

Of course, allegations and human behaviour are complex, so it’s fair to say that one of the biggest issues for a business is where a bullying accusation is made, but there appears to be little outright ‘proof’.

It should be made plain, therefore, that it is NOT actually upon the person complaining to 100% prove that they were bullied, and in what way.

Instead, it is on the business to be able to evidence whether the bullying was indeed probable or otherwise.

It’s for exactly these reasons that leaders of business should always pay due attention to having appropriate policies and procedures in place, which set out the commitment to a culture free of bullying or harassment in any form.

At the same time, it helps for a company to have a clear system for reporting concerns or specific allegations.

We would always recommend a conversation with our highly experienced team about putting such policies in place, or indeed, looking at the likes of ACAS for further information.

Here, in the meantime, are five key points with regards bullying and the workplace:

  1. Having an anti-bullying policy and a clear whistleblowing process are important preventative and safeguarding steps for any organisation;
  2. Allegations should be handled with speed, and maintaining complete fairness throughout;
  3. Bullying means different things to different people, however ultimately relates to someone feeling uncomfortable with their treatment by an individual or culture;
  4. Never underestimate the importance of thorough HR and legal advice. This is not an area to ‘guess’ your way through; and
  5. Remember it is not necessary for the complainant to 100% prove they have been bullied.

For more advice or support from our team, or to arrange a bespoke webinar session to build the confidence and capability of your management team, contact us on 01473 360160.

You can view this original article and other content at Mad-hr.co.uk

10 popular myths about HR

by Charlotte Bate, Director MAD-HR

There are many persistent and common myths about HR, which have somehow become so ingrained in HR folklore that they could almost be considered urban myths.

In general, most HR myths tend to involve matters that an employer “can’t” do or, just by their tone, always seem to have negative connotations.

Here’s a rundown (in no particular order) of the top 10 most common myths about HR:

1. You can’t contact employees when they are off sick

Employers have a duty of care towards their employees and that duty doesn’t end when they leave the workplace at the end of the day. In fact, this duty extends to employers making sure that they “keep in touch” and maintain regular contact with their employees when they are signed off to see how they are doing.

Regular contact with a sick employee should be compassionate and focus on their wellbeing not just enquiring when they will return to work. A good company sickness policy and procedure will assist employers in ensuring that they are able to effectively maintain contact with and manage those employees off sick.

2. You can’t dismiss an employee who is genuinely off sick

Providing the employer follows a fair process, dismissal for capability due to ill-health is a lawful “fair reason” for dismissing an employee. If the employee is never going to be able to return to work, it is not reasonable to expect an employer to keep their job open forever and therefore under these circumstances an employer could look to dismiss. Persistent short-term periods of absence can equally be dealt with through a robust ‘managing sickness absence’ policy. Providing the employer is able to demonstrate that the business is not able to sustain unacceptable levels of sickness absence, that they have considered any reasonable adjustments required and followed a fair process, then an employer would be entitled to dismiss.

3. You can’t give a “bad” reference

Aside from exceptional limited sectors there is actually no obligation for an employer to provide a reference. However, if a reference is provided then it should be fair, accurate and not misleading. When providing a reference, employers should stick to evidenced based facts, otherwise they could find themselves open to legal challenge from either the ex- employee or new employer for misleading them. For this reason, many employers choose only to provide what are known as “tomb-stone” references, which literally only sets out the basic confirmation of employment details.

4. You can’t dismiss an employee when they are on maternity leave

It is certainly unlawful discrimination to dismiss an employee just because she is on maternity leave. However, it is perfectly legitimate to dismiss an employee on maternity leave if her role is redundant (although certain specific rules apply) or she has committed an act of gross misconduct.

5. Employees with under two years’ service have no rights

Employees with under two years’ service can’t bring ordinary unfair dismissal claims. They can, however, bring claims for breach of contract, for holiday pay, discrimination, maternity rights, whistle-blowing, protective awards, and most other employment claims. Some of these rights (such as discrimination) begin even before the employment relationship has started.

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6. The contract isn’t signed; therefore, it doesn’t count

The employment contract does not necessarily have to be signed for it to hold up in court – it doesn’t even need to be written down. The validity of a contract that has been agreed verbally or not signed admittedly can be more difficult to verify, but it can still be legally binding.

For example, if an employee starts work and has seen their contract but hasn’t yet signed and returned it, they could still be held to the document’s terms as working can be seen as accepting those terms.

7. Employers have to give time off for bank holidays

Employees have no right to bank holidays off, or to be paid more for working them. This entirely depends on the contract between the employee and employer. Full-time employees are legally entitled to 5.6 weeks holiday a year and bank holidays can be counted as part of those 5.6 weeks, but they don’t have to be.

8. Employees returning from maternity leave can demand to change their hours or days if they want to

Employees returning from maternity leave, providing they meet the criteria of having over 26 weeks’ service and haven’t made a flexible working request in the past 12 months, have a right to ask for their working pattern to change. They will usually need to specify the hours/days they would like to work, how it will benefit them and how they think it would work for the business. The employer must consider the request, but they do not have to accept it.

9. When HR is in the room, someone is about to get fired

There is a stigma that if HR is in the room, it’s not going to be a pleasant conversation. This couldn’t be further from the truth. At many companies, especially smaller businesses, human resources are involved in business operations and are not always in the room for potential terminations. HR is there to be part of the team, foster a positive environment and advocate for the company and the employee.

10. HR makes the decisions 

HR makes recommendations, not decisions. Whilst HR is a key strategic department, operations are determined by the senior leadership/owners of the business. However, that line between recommendations and decision making is often misunderstood by staff. Clearly, if a company or business is struggling economically, it must be able to look at all options available to them, which may include restructuring the business or even, if necessary, making redundancies to survive, all of which require input and recommendations from HR.

Professionals who work in HR know that these false perceptions can make their jobs more difficult, and whether they breed resentment toward HR or simply discourage employees from reaching out, the impact is often detrimental. It is clear that only by working together in dispelling these myths, will we start to see the true value HR brings to a business.

If you would like help banishing these myths from your business, please call us and speak to a member of our team here.

If you would like to discuss how we can Make A Difference to your business through our provision of HR services, please get in touch on 01473 360160 or visit our contact page here.

You can view this original article and other content at Mad-hr.co.uk

Top 10 scary facts about HR

by Charlotte Bate, Director MAD-HR

From the looming retirement crisis to the fastest ever fall in number of EU workers, we look at the top 10 scariest facts and statistics about HR that are likely to impact the world of work in the near future.

1. Employee mental health & wellbeing

A staggering 70 million work days are lost each year due to mental health problems in the UK, costing employers approximately £2.4 billion per year1. Mental health is a business imperative. People are the most important resource, yet one in four will have a mental health issue. Mental health issues are the number one cause of sickness absence in the UK. Around half of all long-term sick leave in the UK is due to stress, depression, and anxiety.

The statistics are concerning, not just for the pandemic but the predictions beyond it. Over the past year we have seen companies doing great things to support employee wellbeing during the tough times of the pandemic, but employers need to be looking at what additional wellbeing initiatives and support they can offer their employees.

2. Alcohol dependency among staff

There are 31,767,000 workers in the UK. And a recent survey has found that 85% of 2,600 people surveyed have been drunk in the workplace in the last year. 31% of them admitted to being drunk at work or being unable to work as well due to alcohol, at least once a week.2

Based on that 31% sample. This means that 9.8 million of the British workforce in any one week is drunk at work or has impaired capacity to work. That is a massive 1 in 4 British businesses that have, on average, at least one worker per week at work who is drunk. Or incapable of carrying out their job properly because of alcohol.

It is estimated that £7.3 billion is lost each year in business productivity due to alcohol related issues in the workplace. And 17 million working days are lost each year due to alcohol related sickness! And a staggering 200,000 workers turn up to work hungover on any given working day.

3. Company car drivers’ accidents

Did you know that company car and van drivers are involved in a staggering one in every four serious accidents on the road? And sadly, every week around 200 serious injuries and, even worse, road deaths occur that involve fleet drivers.3

The cost of these accidents does not only ruin people’s lives, but it also has a huge impact on the companies who employee the fleet drivers that are involved in the road accidents, more often than not costing them hundreds of thousands of pounds (sometimes even millions) on fleet repairs, insurance, time off work for drivers and court cases, etc.

4. Cost of recruitment

On average, the cost to employers of replacing a single member of staff is more than £30,000, according to a recent report. The analysis from Oxford Economics found that by far the greatest expense (more than £25,000) comes from loss of productivity caused by the time it takes (28 weeks on average) for a new recruit to get up to speed.4

The remaining costs arise from the logistics of finding a replacement, it said. This includes agency fees, advertising costs, HR and management time, and the possibility of hiring temps before the new role started.

The analysis was based on figures drawn from five different sectors: retail, legal, accountancy, advertising, and IT and technology. Over a year, the report said the total costs for the sectors combined would amount to £4.13 billion.

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5. Engagement

According to the 2020 Global Culture Report, compiled by O.C. Tanner Institute, as much as 50% of employees in the UK feel underappreciated at work5Added to this, social distancing measures mean that as much as half of the employed population are still working remotely, further adding to the likelihood of them beginning to feel detached and neglected.

Work-life balance is the top driver of engagement at work, but it is not traditionally an aspect that many employers ask their employees about. Businesses tend to focus on standard elements like pay or traditional career progression, but recent studies show factors like showing support for your employees’ work-life balance and giving them a chance to try more lateral things in their role have a greater impact on engagement.

6. Employment tribunal statistics

The employment tribunal quarterly statistics for the period from April to June 2020 published by the Ministry of Justice,6 reveal:

Single claim receipts and caseload outstanding rose by 18% and 31% respectively in this period, while disposals decreased by 21% to 4,496 compared to the same period in 2019.  Multiple claim receipts and disposals dropped by 43% and 47% respectively, while outstanding caseload increased by 6%.

Annual compensation and costs awards figures have also been published for the employment tribunals and the EAT.  A total of 160 discrimination cases were awarded compensation in 2019/20.  The highest award, amounting to nearly £266,000 was for disability discrimination, while age discrimination cases received the largest mean average award (£39,000) compared to other discrimination jurisdictions.  Unfair dismissal mean average awards decreased to £10,812 from £13,704 in the previous annual figures.

The Ministry of Justice commented that the increase in single claim receipts was likely to be due to rising levels of unemployment and changes to working conditions during the pandemic.  It noted that this was “the highest level of single employment tribunal claims since 2012/13”.  Caseload outstanding has surpassed its peak levels recorded in 2009/10.

7. The majority of workers over 50 want flexible working

Currently in the UK, there are 10.2 million people over the age of 50 in employment. The Department for Business, Energy and Industrial Strategy (BEIS) arranged for a large-scale survey of over 12,000 workers over 50 and found that nearly 80% wanted more flexible hours and 73% wanted to see more part time positions offered. 63% said that they wanted training schemes to help them gain new skills and to deal with technology.7

8. Fastest ever fall in number of EU workers

Figures released by the Office for National Statistics have shown that the number of EU workers in the UK has taken the sharpest fall since records were first taken back in 1997. In the period between July and September 2018, numbers fell by 4.5% compared to the same period in 2017, which equates to 107,000 people.8

The CIPD recently advised that employers are finding vacancies harder to fill due to the decline in migrants coming to the UK since the vote to leave the EU. More than two in five employers have reported finding it “more difficult” to fill vacancies over the past 12 months.

9. Retirement

In the UK today, there are approximately 12 workers for every retired person. By 2050 that is expected to reduce to four workers per pensioner. That is a third as many workers to fund a bill that is going to be three times as large. Or, in other words, nine times as much tax that somebody is going to have to pay.

Excluding those still lucky enough to be in a final salary scheme, the average UK worker today retires with a pension pot of £40,000.9 With annuity rates around 5% that will buy a pension of £800 a year – or about £15.50 a week.

According to one online pension calculator, an 18-year-old on the new living wage who puts away 8% of their pay for their whole working life would end up with a pension of roughly £3,700 per year at age 68. That is assuming their employer puts in the current requirement of a 3% contribution.

It is fairly evident that there is a huge crisis looming and somebody, sometime soon, is going to have to do something about it.

10. Apprenticeships

Recently published apprenticeship and traineeship statistics for final year-end data for 2019/2010 reveal:

Total apprenticeship starts are down 18%. The number of apprenticeship starts for the whole of 2018/19 totalled 393,400, but this dropped to 322,500 in 2019/20. Of those starts in 2019/20, 47% were from apprentices aged over 25, while 25% were for higher apprenticeships.

Starts for both level 2 apprenticeships and under 19 apprentices dropped.

Traineeship starts were also down 18%. Starts on traineeships took another dip in 2019/20, falling to just 12,100 from 14,900 the year before.

Take up of the pre-employment programme, introduced in 2013, hit a high of 24,100 in 2015/16 but have been dropping since.

From August until 12 November 2020, the number of apprenticeship redundancies reported so far was 1,190. Of these, 22% were under 19s, 35% were aged 19 to 24, while 43% were for 25s and over.

The Government hopes to triple traineeship starts to over 40,000 for this academic year, with a higher funding rate for 19 to 24-year-olds, employer incentives and a tender to find extra providers among new measures.

If you would like to discuss how we can Make A Difference to your business through our provision of HR services, please get in touch on 01473 360160 or visit our contact page here.

You can view this original article and other content at Mad-hr.co.uk

5 things we wish all employers knew about HR

by Elaine Coe, MAD-HR

As an owner or leader of a business, you have to wear many hats. Whilst HR is most certainly one of them, it can be tricky trying to navigate complicated employment legislation and employee issues, providing strategic HR or managing the coaching and development needs of the team.

Whilst you are unlikely to become an expert if every field, we do think it is worthwhile to understand some basic HR principles as this can help you manage risk, retain your employees, give them the opportunity to develop and contribute more and, inevitably, lead to your business’ success.

Here are five points that we wish employers knew about HR.

1. You are a business owner or leader; you are HR too

A leader or manager skilled in basic HR is a great asset to any business. Do you know the basics of employment law? Company policies? If yes, are you actively using this knowledge to help the business mitigate risk.

Do your employees know what your company policies are and have a basic understanding of them?

Do you have an office manager or administrator who has become your businesses go to for HR queries and fixes? Sound familiar?

It is worth exploring what training have you given them recently, as with all of the changes in employment legislation and government guidance, they may be feeling overwhelmed and unsure even when they are on the face of it doing an amazing job.

MAD-HR offers a training workshop specifically for those we call HR Heroes: the office manager, the PA, the partner of the business owner, the finance person, and those carrying out HR alongside another role and lacking the underpinning knowledge.

This is a four-part training course that has been designed to reflect new working arrangements and restrictions. Available online, the course can be accessed from your own place of work, wherever that may be.

2. People leave their managers, not their job

Exit interviews conducted show that, time and time again, the strongest influence on an employee leaving is the manager’s impact on the employee experience – that’s a lot of pressure!

Those same exit interviews show us that it is the small things that really matter. Many times, we have been told by employees that their manager rarely greets them, never says ‘thank you’, only talks to them when they have done something wrong, never praises their achievements, and so on…

Business owners, directors and managers are under enormous pressure and sometimes fail to pause, reflect and acknowledge. As you rush from a conference call to answering emails and thinking about your next appointment, take the time out to put down your phone and engage your team in a meaningful way. Why not schedule some time to place a call to your team, find out what is going on in their worlds, take a genuine interest? This is incredibly valuable to your team and you will all reap the benefit.

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3. You are the ambassador of recognition and rewards

Perhaps as a business you offer a rewards scheme. How often do you shout about it? Or is it the least visited page on your company intranet?

Challenge yourself to make the most of it; talk to your employees about it, share team achievements, catch people doing things well.

What if you do not have a rewards scheme? There is no time like the present to start! Even rewards as simple as a thank you email, a gift card for a coffee or lunch on you, are enough to help an employee feel valued. Plus, by recognising others’ achievements, it not only improves their morale, but it makes you feel good too.

4. You are a leader/manager 24 hours a day, 7 days a week

As HR professionals, we navigate and mediate a number of workplace concerns that can happen outside the workplace, but directly impact the business. Whether it’s the Christmas party, a few drinks after work, an off-site team building activity, what happens at these events rarely stays at the events. Having fun with your team is important, however, all the policies that dictate professional behaviour, protect against harassment and promote safety are likely to be relevant and need to be followed even when off-site.

Please celebrate and enjoy time with your team but remember to remain professional and lead by example.

5. There are times when you will need an HR professional

In our experience, every business needs effective HR support. Your people are your greatest resource; treating your employees fairly and providing them with opportunities to grow will help you achieve your ambitions and hit your business goals.

HR plays a significant role in developing positive business culture and improving employee engagement, productivity and operational efficiencies.

Do not wait until an employee comes to you raising a complaint, another team member has left during their probation, or your sickness wage bill is alarmingly high. Investing in great HR now will pay dividends, particularly when you are partnering with a champion of your business, your values and culture. A great HR consultant or business partner can be a cost effective way to get the skills and experience you need, when you need them. They will get to know your business and its ethos, demonstrate a return on investment and increase the knowledge and productivity of your employees.

If you would like to discuss how we can Make A Difference to your business through our provision of HR services, please get in touch on 01473 360160 or visit our contact page here.

You can view this original article and other content at Mad-hr.co.uk

Motivation in the Workplace

By Alex Sellers, Director of Learning and Development at Turning Factor

There are countless articles and books written on the subject of motivation, and in particular, how to get the most out of our employees in the workplace. It is fairly clear that there is no one set of step-by-step rules to encourage people to maintain 110% effort 100% of the time.

Motivation can be defined as energy. Consider for a moment how you feel when you are motivated or demotivated. Are you energised? Are you engaged? Or do you feel lacklustre, tired and stressed? If we have too many people in our teams and businesses who are consistently demotivated, then the impact can be dramatic and difficult to recover. It is well known that negativity breeds negativity – when people feel isolated, frustrated and disengaged, the natural inclination is to pull other people into that world to create justification for these negative feelings. The literal opposite is true of teams and organisations where there are high levels of motivation and engagement – there is a competitive advantage to having high levels of motivation present across your organisation.

What is clear is that beyond strategy, structure, traditional performance management and organisational objective setting lies a universal and underpinning truth.

This truth is that people in the workplace have a choice about how much and what kind of energy they put into the work they do. This is called ‘discretionary effort’ and that there are many factors that can influence this choice. It is our role, as leaders and managers, to understand these factors and, therefore, what influences people’s levels of motivation.

So what can we do as leaders to encourage our people to remain focussed and engaged in their activities? Studies show that people are more engaged in their work through the right balance of intrinsic and extrinsic motivational factors.

Let’s look for a second at Frederick Herzberg’s ‘Two Factor theory of Motivation’, a widely accepted theory, which he developed in 1959 following a study of over 200 professional workers at the Ford Motor Factory. Herzberg suggests that there are two principal and different areas of need in the workplace that affect satisfaction and motivation. His work follows on from Abraham Maslow’s ‘Hierarchy of Needs’ and is classified in the group of motivational studies that are based around human beings’ desire to satisfy a need.

Herzberg stated that there are two distinct areas that we as leaders and managers need to pay attention to. The first of these areas he called hygiene factors, and they include things like working conditions, relationships with our peers and supervisors and, interestingly, pay. He found that the perceived absence of any of these factors would create dissatisfaction and he also found that if these factors were sufficiently present (in the perception of the workers), they would not increase levels of motivation, they would simply prevent dissatisfaction. The second of these two areas he referred to as motivators and these included things like achievement, recognition, responsibility, growth and the nature of the work itself. He found that when these factors were sufficiently present, they could positively motivate and when they were not present, they could demotivate. The two factors exist separately and the factors lead to positve motivation are fundamentally different nature to those that lead to dissatisfaction.

The beauty in Herzberg’s theory lies not in the precise validity (which has been challenged due to the size of the control group) but in how we look at the things that are important to us and our teams in the workplace. Consider for a second how you feel or felt when you got a pay rise. I am sure there would have been the flush of excitement, the thoughts of what we could do with the money and the added security … but how long did these feelings last? Now consider for a second the deeper reward that a pay increase gives us. Surely the pay increase has more meaning when we understand that it is a recognition of our value to the organisation that has garnered this increase. Herzberg found that the two most important motivating factors were achievement and recognition. He also found that hygiene factors had to be present to avoid dissatisfaction, but could not in themselves alone increase levels of motivation.

So, when we are in our businesses and our teams perhaps it is not enough to simply address the working conditions, environment or get the exciting new gadget. We need to be paying very close attention to how we are challenging, enriching, supporting and recognising our individuals and teams for the work that they do.

To consistently encourage high levels of motivation we should be looking to empower, challenge and engage our team members and ensure that we support and recognise their hard work and efforts towards our mutual goals. As managers, we should be constantly on the look out for things that we think are motivating our team, but are actually hygiene factors. The point is that we have to work hard to encourage positive motivation and we have to have the courage and self-awareness to challenge our own preconceptions of what truly motivates an individual. Simply put, we have to invest our time and energy to see the results. But when we do, those results will be dramatic and inspiring.

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Continuous Personal Development is Not all Honey and Cider

It was a statement I had expressed hundreds of times before, “continuous personal development (CPD) is fundamental in progression of not only your career, but also your life”.

It was a statement I had expressed hundreds of times before, “continuous personal development (CPD) is fundamental in progression of not only your career, but also your life”.

I was speaking with a new group of Operations & Departmental Manager learners at a large company specialising in the oil and gas industry. These were people experienced in their fields and now being prepared for future career progression as managers through the apprenticeship levy. We spoke about how CPD was not only about work, but also how outside interests could also play a part in how they viewed their world in general.

“Everyday is an opportunity to learn something new, even if that is for our own journey and mental health.”

I have recently started a bee keeping course, firstly to build on my hobby of producing delicious and natural treats for the home (I produced my first batch of cider last autumn), and secondly, to carry on my own yearning to continuously learn new skills. Whilst neither of these learning experiences are directly linked to my work, I do bring my newly acquired learning into my training and to demonstrate areas such as supply chain management and entrepreneurial mindset. Everyday is an opportunity to learn something new, even if that is for our own journey and mental health.

So I was surprised this morning to come across some information which prompted me to put fingers to keyboard (whatever happened to pen to paper?)

People aged 30 to 44 spend just nine minutes a day on average on improving their qualifications. And for people aged 45 to 64, the figure is even lower — only four minutes.

“For me, CPD narrows the gap between what we know and what we don’t know that we don’t know!”

It appears that we give little thought to our own personal development, but why? Whether it is furthering our career possibilities, or moving our business forward, it is my belief that CPD is key to personal growth. I see this daily with apprentices of all ages, I witness their growth and how they increase their understanding of the world around them. For me, CPD narrows the gap between what we know and what we don’t know that we don’t know!

As someone who went back to academia after being in business for over twenty years, probably the biggest lesson I took away with me was that if we want to create new, innovative and impactful ventures, then we had better have a wider contextual view of the world around us. That view can only be enhanced by learning new skills and having an understanding of the skills we do not have, or are unable to attain, therefore bringing them in from the outside. That allows us to join the entrepreneurial dots and see what others cannot.

So how is your CPD? Will it allow you to move forward and grow? Even a small amount on a regular basis can make a lasting impact and as we all know, there is no better time than NOW to begin.

9 lessons business leaders can learn from sports coaches

Leon Davies, Sustainability Consultant

There is arguably no more pure form of leadership than coaching a sports team, and business leaders can take many lessons from the world of sports team management.

I had a manager at work a few years ago who had rowed for Australia. He had a phrase he often used that has stuck with me: “Don’t say anything unless it makes the boat go faster.” In its literal application, it made sure team members only opened their mouth in competition if it helped correct a fault or offer encouragement. In the five and a half minutes it takes an eight-man team to complete a race, there is no time for negativity or personal agendas. Every second literally counts.

Of course, the use of sports phrases in business is nothing new. Whether you have a ‘game plan’, are ‘pitching’ to a client, or have just ‘dropped the ball’, the lingo crops up every day.

And more useful than these simple idioms has been the motivational wisdom shared by the great sports coaches over the years. Scan YouTube for motivational speeches and it is a mixture of sports stars and business leaders sharing their advice. 

“The only place success comes before work is in the dictionary,” – Vince Lombardi 

Perhaps you’ll just find them as memes on your social media feeds, but maybe you have the odd one printed or framed as an inspirational trigger. Lombardi was the first truly great sports coach to be thought of in this way. The hugely successful Green Bay Packers coach of 1960s American Football revolutionised what it was to coach a sports team. He was capable of gems such as: “Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilisation work.”

And…

“Leaders aren’t born, they are made. And they are made just like anything else, through hard work. And that’s the price we’ll have to pay to achieve that goal, or any goal.”

Teamwork and self-discipline were the pillars of his philosophy. He was very much about the greater good of a team; it was almost a form of sports socialism. Without that, he felt that you just have a group of people doing their own thing.

The challenge in business, as in sport, is to get them working together smoothly. And that often needs a whole range of skills.

Great sports teams are often led by an inspirational character with powerful motivational skills – most often someone who has played the sport themselves and walked in their shoes. They can understand the challenges the team faces, because they faced them in the past.

There is invariably plenty of communication happening on the sports field – much of it robust and direct. Shouting, gestures, instructing each other. And an acceptance that it is all in the name of the team’s greater good. There is an implicit trust that it’s not just about the individual’s need to be heard.

This trust comes from training and preparation. And unlike the business world in some respects, the majority of what a sports team does is preparation. Almost 90% of time is spent getting ready to do the job of competing. While this isn’t possible for the business world, you do sometimes get a sense that people at work are always busy. Flat out ‘doing stuff’ to justify their existence. Perhaps not enough time is spent thinking and planning. 

“Leaders aren’t born, they are made. And they are made just like anything else, through hard work. And that’s the price we’ll have to pay to achieve that goal, or any goal,” – Lombardi 

And of that thinking time, the vast majority will be spent analysing what went wrong, rather than focusing on success and what you’re good at. Sport is always about looking at the positives and becoming even better.

Of all the modern sports, Premier League soccer in England is perhaps where sports coaches are most tested. 

The parallels with commerce are strong – the Premier League is big business. A manager needs to recruit a diverse bunch of individuals with the budget at their disposal, get a strategy in place, manage and motivate large egos and achieve results almost immediately. Change management at an acute level.

The average tenure of a football manager in the EPL is just over a year. And the resilience they have to display in the face of incredible scrutiny can be soul destroying. Nearly three years, Bob Bradley took over at Swansea City, having previously managed the American national soccer team. He lasted 11 games in around 85 days and was sacked. 

Imagine the CEO of Telstra or Optus sacked after less than three months, while simultaneously being booed by a stadium full of customers and their results picked apart right the way across the media as a form of entertainment.

unsplash-image-5fNmWej4tAA.jpg

Accept what you cannot control, and focus on what you can affect is one of the lessons business leaders can learn from sports coaches.

To survive 27 years as a Premier League manager then, takes a special individual. Step forward Sir Alex Ferguson.

In over 38 years in management, the working-class Scotsman won an astonishing 49 trophies. He helped grow Manchester United into one of the biggest brands in the world. And interestingly often credits the workers at the shipyards in Glasgow where he grew up, as an inspiration for the teamwork he strived for. 

Obviously his management credentials are respected in the sporting world, but they have also been recognised elsewhere. Professor Anita Elberse of Harvard Business School called him “one of the world’s all-time great leaders”.

Ferguson has had a book published called Leading, co-written with his friend and long-time collaborator Sir Michael Moritz, a successful venture capitalist. It is about the lessons he learned in football that can be applied to business and everyday life.

Ferguson was the manager who showed David Beckham the door when he felt Becks had become bigger than the team. His book focuses on the qualities he identifies for team success: hiring and firing the right personnel, mastering boardroom politics, coming back from failure and adversity, discipline, control. But also perhaps unexpected skills such as data analysis and delegation. 

And famous for trusting young players such as the Class of ‘92, Ferguson believes youth has a strong part to play in business. “If I were running a company, I would always want to listen to the thoughts of its most talented youngsters, because they are the people most in touch with the realities of today and the prospects for tomorrow.” 

In researching this piece, a number of threads came to the fore from various sports and coaches; here are nine recurring themes about what business leaders can learn from sports coaches:

  1. Teamwork, communication and self-discipline are the cornerstones of team success
  2. Perfection never happens – so don’t let its pursuit slow you down
  3. Failure usually comes before success – you win or you learn
  4. Be obsessed with improving
  5. Accept what you cannot control, and focus on what you can affect
  6. Simplify your game plan into manageable components for the individuals
  7. Visualise success and understand what success looks like
  8. Encourage diverse personalities – everyone has a different skill and role to play
  9. And perhaps most importantly of all, especially for micro managers, remember that: Coaches can’t get out on the pitch and play. Set the game plan, communicate, motivate and then let your team go to work

The final word goes to John Calipari, an incredible university basketball coach in the US:

“Leadership is about serving everyone under you, asking yourself, ‘How do I give you the tools you need to succeed and proceed?’”

It’s a great lesson to take into business. But there are plenty of others…

Source: www.theceomagazine.com

Five flaws that could be your biggest strength in business

NatWest Business Builder: Self Awareness

© Getty Images
© Getty Images

It takes a certain set of qualities to be a great entrepreneur, but not all of them are what you might expect. Here, we speak to SME owners about the personal ‘flaws’ that have aided their success.

Characteristics that some people might see as flaws could actually serve you and your business well, providing you know how to use them properly. Below are five prime examples of business-friendly flaws and a little insight from those who’ve used them to their advantage.

1. Stubbornness

Stubbornness is a trait most people try to avoid in their personal relationships, but as a business owner it could help to keep you on the right track.

Keith McNiven is the founder of London-based personal training company Right Path Fitness and has no problem admitting his flaw. “I find it hard to accept when I’m wrong and when I make a plan, I want to see it through no matter what,” he says. “Being stubborn isn’t something I’d put at the top of my social profiles, but it has definitely helped me to develop my business.”

In particular, McNiven’s one-track determination led him to take bigger risks when he started out. “Not content with starting a new business, I also decided that I’d move to London and set it up there,” he says. “It was really hard at first because I knew virtually no one and had left all of my useful fitness contacts back in the north, but my stubbornness saw me through. I was absolutely determined that I was going to make the business work and see through my original plan – and in the end I did.”

2. Introversion

You’d be forgiven for assuming that to be successful in business, you need to be confident and outgoing. After all, self-promotion means putting yourself out there and talking to people. But according to entrepreneur Barry Moore, being introverted needn’t be a barrier as long as you play to your own strengths.

Moore’s Guildford-based holiday agency Party Hard Travel recently announced triple-digit growth for the third year in a row, and he’s confident that his own quiet nature has contributed to the company’s success so far.

“When I was younger, I used to hate being introverted,” he says. “My social skills always seemed behind everyone else’s. I was normally the kid in the corner who wouldn’t say a word to anyone. I used to think it was a huge flaw.

“But looking back at it, the experience I had to go through was amazing because it enabled me to accept being different to the crowd. Rather than being a social person it allowed me to develop other skills.

“I read and study a huge amount, and that’s something the extrovert people I know really struggle with. I’d rather sit behind a computer and play around with numbers than be out and about speaking to people. I really enjoy those behind-the-scenes jobs that a lot of people don’t enjoy doing. This enables us to improve Party Hard Travel and continue to grow and expand.”

3. Obsession

In most areas of life, being obsessed could be considered a negative thing, but in business it often translates as determination – a trait that’s synonymous with success.

That’s certainly the case at West Sussex-based IT firm Ingenica Solutions. “I have been described as a perfectionist, obsessive, determined and competitive and while I would sometimes argue about those descriptions, I have been guilty of them all in the process of starting a business,” says the company’s founder and chief operating officer, Nicola Hall.

“Being stubborn isn’t something I’d put at the top of my social profiles, but it has definitely helped me to develop my business”

Keith McNiven, founder, Right Path Fitness

“But I feel those traits are part of why Ingenica Solutions has been successful; I have been obsessed with the business and utterly determined to make it a success – we’ve just had to make sure that’s all tempered with a bit of fun and humour.”

4. Impatience

No entrepreneur wants to wait for their company vision to become reality, but it can take years of hard work to even get close. One business owner who’s found a positive use for his own impatience is Richard Hayes, CEO and co-founder of online broker Mojo Mortgages.

“In some instances, my impatience has had a detrimental effect on my business,” he says, “but it has also driven me to innovate more quickly, because it just wasn’t feasible to wait for the scale of innovation that I wanted when I started and still want now.”

Hayes found a match for his impatience in a product development team that he says has been crucial to the company’s success. “I realised I could turn my flaw to my advantage after I was introduced to product development,” he explains.

“After realising the opportunity that developing our technology would bring, I knew immediately that working with a product development team would suit my impatience, in that I could effectively deliver through them.”

Asked what advice he’d give other flawed entrepreneurs, Hayes says: “It’s important to ensure that your flaws – in my case impatience – never have a negative impact on customer experience.”

5. Cautiousness

Impatience might be conducive to success for some, but a cautious nature serves Sarah Watkinson-Yull – founder and creative director of London-based retailer Yull Shoes – well, especially when it comes to money.

“I am overly cautious with credit,” she says. “I turn down orders from companies I am uneasy about as not being paid, or even being paid late, can have a huge impact on cash flow. I would rather not have the order in the first place.”

Watkinson-Yull’s cautiousness has helped her build a successful brand in an unquestionably busy sector, and it’s not the young entrepreneur’s only useful flaw: “I nag a lot,” she says. “My pet hate is when I ask someone to do something and it doesn’t get done, but me being constantly on top of everything and everyone means nothing gets forgotten.”

Further Reading

  • Management strategies: the six questions you need to ask your staff
  • Leadership lessons: how to be a good boss
  • Management strategies: why mentoring matters

We have a thriving and diverse community of thousands of entrepreneurs from multiple sectors, backgrounds and skill sets helping you to connect with the right people at the right time. No matter whether you’re looking to upskill, get feedback, engage with new people or simply observe, there’s something for everyone.

‘Want to learn more? Register for NatWest Business Builder to view all of their business development tools. Click HERE

Management strategies: why mentoring matters

NatWest Business Builder: Self Awareness

© Alamy
© Alamy

Whatever level you rise to in business, you probably won’t have all the answers – which is why you should never underestimate the power of mentoring.

From building the leaders of the future to improving staff performance and morale, there are numerous ways that mentoring can boost your business. It’s relevant at every level, because even founders can benefit from a fresh perspective, and it can help with issues such as staff retention, productivity and growth.

“Mentoring ensures staff feel supported, educated and confident in their job roles,” says Alistair Bambridge, founder at Bambridge Accountants, which specialises in supporting clients in the creative industries. He’s a great advocate of mentoring, both for himself and for his team.

“Creating an environment where staff can seek guidance and expand their knowledge is imperative to the success and growth of a business,” he expains. “I use one-to-one mentoring to monitor my staff’s progress and understanding of the business, as well as training-based mentoring as an essential resource to fill any gaps in my own knowledge.”

Mentoring works by drawing on the experience of others. The mentors themselves don’t have to have all the answers, but their fresh perspective can often make the crucial difference.

“Whether your issue is a failing business, working with colleagues you don’t get along with or being overstretched, being mentored by people who have experienced these issues can help you make smart decisions at times of both trouble and opportunity,” says Matt Cross, UK MD at global communications agency Hotwire.

A common misconception is that mentoring takes staff away from the ‘real’ job at hand, but it’s a worthwhile investment, says Bambridge. “Those few hours of one-to-one or group work will help boost morale, unite your team and, in turn, help your employees understand what’s expected of them. The more confident and well-informed they feel, the more able they are to be individually proactive throughout the rest of the week.”

Five ways to use mentoring to boost your business

1. Reverse mentoring

“Mentoring is often seen as a more senior person mentoring a junior person, but it can be used for any situation where you want to develop yourself in a particular area,” says Nick Goddard, head of development at Abstract UK, a company that designs and delivers career development programmes to improve business performance. “For example, we’ve seen ‘reverse mentoring’ where the CEO of a company was being mentored by a graduate to gain a better understanding of how 20 year olds use social media, giving the CEO a better understanding of both his customer base and his younger employees.”

Charlotte Valeur is the founder at Global Governance Group, which specialises in corporate governance advice and training. She has created U25 Mentoring, a scheme designed to bridge the knowledge gap between under-25s and board members, senior executives and politicians.

Through the framework she’s set up, young mentors connect with senior mentees once a month over the course of a year. Besides providing the older mentees with insights that could give their company a competitive edge, the scheme has other benefits, including improved staff retention.

“A lot of companies are concerned about holding on to young talent: if the younger generation are not happy, they’ll just move,” she says. “Reverse mentoring is an opportunity to discover why you’re losing talent.”

The process also prepares young mentors to take on more senior roles in the future.

“The young person has to steer and lead, so this is a form of leadership education,” adds Valeur.

Practical tip: decide on a period of time that the mentoring will run for, hold regular sessions, and evaluate the gains for both parties at the end of the process.

2. Board apprenticeships

Another project founded by Valeur is Board Apprentice, a programme that places company employees on charity boards for a year and supplements this with training in corporate governance.

The apprentice gains a detailed insight into the role of a board member and an opportunity to learn the necessary skills to operate at that level. Meanwhile, the company has a young member of staff who has been coached to take a more senior role.

“External mentors can develop new skills that may not be possessed by managers, giving a fresh approach”

Rob Moore, co-founder, Progressive Property

“More than 50% of them go out and become board members after that year – they have the confidence to put themselves forward because they know what it involves,” says Valeur.

“The scheme is a chance to retain talent and give younger employees interactions with senior people. To the under-25s that means a lot – they’ll leave companies when they don’t feel heard. This scheme can do so much for succession planning.”

Practical tip: give board apprentices opportunities to apply what they’ve learned during their apprenticeships.

3. Outside mentoring for leaders

Bringing in mentors from outside your business can provide valuable new perspectives for leaders.

“External mentors can develop new skills that may not be possessed by managers, giving a fresh approach,” says Rob Moore, host of the Disruptive Entrepreneur podcast and co-founder of property education company Progressive Property.

Meanwhile, Shaun Thomson, CEO at sales and management training provider Sandler Training (UK), adds that business leaders must think strategically when choosing a mentor.

“It’s key that the mentor can deliver value on a number of fronts – not just assisting the business leader with their own personal career development, but also teaching them coaching skills themselves in order to build a company and keep their team motivated,” he says.

Practical tip: identify your challenges and weaknesses and pick a mentor who can specifically help you address these.

4. Formal mentoring within your company

Making mentoring a key part of your HR strategy can result in great benefits for your business, coaching your team through personal and professional challenges, says Moore. “Mentoring allows autonomy, in that it gives guidance or advice that’s sought out, rather than hands-on micro-management,” he says.

Formal mentoring that pairs junior employees with more senior team members can be beneficial when there’s a focus on progression and succession planning, says Natasha McCreesh, founder of mentoring and collaboration business PIP to Grow Strong. Other useful approaches include cross-functional mentoring. “This is a powerful tool in enabling different parts of an organisation to connect and understand each other, creating more engaged and cohesive teams,” says McCreesh.

Practical tip: allow employees time away from their regular tasks to spend in mentoring – it can benefit your business in the long run.

5. Informal peer mentoring

Besides structured mentoring programmes, informal peer-to-peer mentoring can provide greater cohesion and support within your team. “Developing informal peer mentoring as part of the organisational culture is positive and empowering, so training staff on mentoring approaches is a valuable investment,” says McCreesh.

A less formal peer-to-peer approach can often overcome resistance to mentoring, too.

“People are generally resistant if they feel that mentoring has been imposed on them, if they have a perception that they’re being mentored because something is wrong, or they haven’t been involved in choosing their mentor,” she says.

Practical tip: encourage your employees to take ownership of their mentoring by choosing peer mentors.

Further Reading

  • Management strategies: the six questions you need to ask your staff
  • Leadership lessons: how to be a good boss
  • Five flaws that could be your biggest strength in business

We have a thriving and diverse community of thousands of entrepreneurs from multiple sectors, backgrounds and skill sets helping you to connect with the right people at the right time. No matter whether you’re looking to upskill, get feedback, engage with new people or simply observe, there’s something for everyone.

‘Want to learn more? Register for NatWest Business Builder to view all of their business development tools. Click HERE

Smart savings for start-ups

NatWest Business Builder: Cost structure

Starting a business is no small feat, and in the first year every penny matters. We look at practical economies SMEs can make to keep their budgets in check and survive that challenging first year.

It costs an average of £27,520 to set up a business in the UK, according to a recent survey of 850 new companies. Nearly half of these entrepreneurs used their own savings, and almost a quarter had help from friends and family. That’s quite a financial – and personal – investment.

But with careful planning and thinking outside the box, business leaders can slash those costs dramatically.

Here are a few ways you can save cash in that all-important first 12 months.

Choose your location carefully

Much of your spend on premises, staff and suppliers depends where in the UK you are. The average London business spends around £30,000 just on admin during its first year, but head to Wales and you could pay just a quarter of that. The cheapest place to launch a business in England is Yorkshire, where average first year costs for start-ups are £11,454.

Refurb’s the word

It might be tempting to kit all your team out with the latest tech but refurbished computers, tablets and phones can give you the same quality for a fraction of the price. “Technology moves so fast that it can be hugely expensive to invest in new kit that could be outdated in six months,” says Geoff Wightwick of accountant RSM UK. “But cheaper alternatives are out there. Look for those low-cost options in everything you do. It’s not just tech – keep a lookout for businesses moving premises, which will often be offering unwanted office furniture cheaply, or even free.”

“People tend to note down utilities as a fixed cost. But [you’d] be amazed at how much you could save by paying a little attention”

Jason Smith, founder, Business Electricity Prices

Conserve your energy

“People tend to note down utilities as a fixed cost,” says Jason Smith, founder of advice website Business Electricity Prices. “But [you’d] be amazed at how much you could save by paying a little attention.”

This is particularly true if you’re taking over a premises. “New tenants get put on ‘deemed rates’, which is the second highest tariff out there,” says Smith, “and many businesses don’t even notice. But you can change it immediately by calling the provider. Also, make sure you shop around at renewal time – some ‘automatic, take-no-action’ renewals put you on a 30% higher tariff than you were paying before.”

Share your space

Finding premises is costly – so why not join a co-working hub? Britain’s increasingly flexible working culture means new businesses that previously might have had to commit to a year’s rent for a space they could never hope to fill can now hire space one desk at a time, on an ad hoc basis. “It’s brilliant,” says Jane Porter, who set up her bespoke uniform fashion-design company Studio 104 at Shoreditch co-working hub The Brew. “We started with two of us, and a tiny space to match, and we now have 10 staff and just expanded on the site, and without the tie of a fixed-rent contract. This allows companies to grow and shrink, and pay only for the space they use, when they use it.”

And it’s not just office space that can be shared. Many universities now have business incubation centres/enterprise hubs, which let units, including industrial spaces, to start-ups at affordable rents – and often offer free mentoring and business advice.

Exchange

If you need to buy something, you don’t necessarily have to pay cash for it. If your product or service is of use to, say, the local printer, you could do a deal offering your product in return for producing your promotional materials.

And this can scale up, too. “This is a fantastic way to buy, especially if you’re struggling for cash flow,” says Chris Kirby, who with business partner Greg Harrand runs the British arm of Australian firm Bartercard. “We have 54,000 global ‘Barter cardholders’ who sell their services to fellow members for so-called ‘trade pounds’, which they can then spend on a product from another member. It’s a brilliant way of reducing expenditure.” The UK franchise only opened up in April, but already has 2,000 members and is aiming for 10 times that by 2020.

Moving to hire ground

Staff are a costly expense – essential in the longer term, but freelancers might suit you better to begin with. “It could be a flexible, cheaper option than staff when you’re starting out,” says Bobby Lane, start-up consultant at London-based accountants Blick Rothenberg. “You hire them when you need them and, as they’re self-employed, you don’t need to provide the employee benefits you would for those on permanent contracts. Freelancers are particularly good for short-term, specific projects, but even employing them for more general tasks you avoid long-term fixed costs.”

Head in the cloud

There’s no longer a need to buy expensive servers and office software – cloud-based software will save you money on hardware and installation, or upgrading in the future.

“It’s an obvious money-saver for start-ups and SMEs because it’s so much cheaper than setting up a network,” says Robert Davies, who runs technology consultancy business Kashiko. “Most providers will offer word processing, spreadsheets, calendars, while cloud-based accounting is secure and can give your accountant real-time access to your figures, which will save you money too. You don’t need an email server, you just buy as many addresses as you need, with your own domain name. And the biggest advantage is that if you suffered a fire or a theft, you don’t lose any of your files.”

But, Lane warns, however you save money, it should not be shorthand for cutting corners. “Every start-up has necessary expenses, and it’s foolhardy and short-sighted to cut these out for the sake of saving a few pounds. The key is to plan, evaluate where you need to spend the money and then work out the most cost-effective way to do it.”

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