How much are high turnover, operational or customer service problems, low productivity, or waste costing you? What would your company look like if you tackled some of these obstacles through a new “good jobs” strategy? Investing in your workforce is no simple feat. However, cutting labor costs through low wages, insufficient benefits, and lack of training can have serious implications on your staff’s productivity, turnover, commitment, levels of customer service—and therefore your bottom line.
For workers earning less than $50,000 annually, the typical cost of turnover is 16-20% of an employee’s annual salary. The estimated cost to replace a $10-per-hour retail employee is approximately $3,300. Successfully engaging employees means they’re more likely to stay at—and grow with your business. Lower turnover helps to reduce the costs of training and hiring.
Small businesses operate in an increasingly competitive market, especially with rising minimum wages and a growing number of laws related to workers’ rights to stable schedules and paid leave. Proactively taking steps such as raising wages, providing scheduling that works for your employees and your business, and streamlining operations can help your business provide exceptional customer service and enable you to readily adapt to market- and legislation-based changes. While raising wages and offering more expansive health and retirement benefits aren’t always possible for every small business right away, every employer can take steps to prioritize employee engagement. Employee turnover can be a financial burden to your business.
That sounds easy to say, but where do you even start? In our new toolkit, Good Jobs, Good Business, Pacific Community Ventures offers practical help small business owners create jobs that boost the bottom line.
Good Jobs, Good Business walks you step-by-step through the six key areas that matter most to your workers:
- Employee Compensation
- Health Benefits
- Retirement Benefits and Other Wealth-Building Strategies
- Scheduling, Vacation and Paid Leave
- Hiring, Training, and Professional Development
- Employee Engagement
Each section has detailed advice, workbooks, and stories and advice from fellow small business owners on how they themselves implemented things and how it helped their company.
This Good Jobs, Good Business approach is already helping small business owners grow revenue and create jobs that pay average wages of $20 per hour, and over half the workers so far have health benefits, paid time off, know their schedules weeks in advance, and/or get opportunities to build new skills for their careers. These are small business owners like Iliana Berkowitz, the owner of As Kneaded Bakery. Inspired by the sourdough bread tradition of California and the breads of her Jewish heritage, As Kneaded serves loaves that blend cultures and fill bellies. Since Iliana started working with PCV’s small business lending and advising programs, her staff has grown from 4 to 12, and her revenue has more than doubled allowing her to invest more in her business and her staff.
We also know that the best advice and small business success stories aren’t always enough. If your small business wants to start implementing these practices but needs a little hands-on help, we’re proving free expert business coaching to walk you through things from start to finish. Learn more about free business advising from Pacific Community Ventures.