The latest post over on the People Positive Culture blog is “Throwing money at candidates?”. Steve Potestio delves into the difficult subject of new recruits who require more than a company needs to or should pay. Steve points out that if you have a place where people want to work, pay won’t be the only factor prospective employees take into account when considering an offer. Let’s take this one step further. Not only does having a great place to work have the potential of saving dollars on salary, it introduces other savings as well.
In creative environments, the amount of time it takes to complete a project directly impacts your bottom line. More hours = less profit. You can hover over a designer all day, but that’s not going to make the creative process any faster. You’re not churning out widgets, so you have to look at things a little differently in project and financial management. In creative agencies, it becomes important to invest in the business culture to foster the creative process. Spending on comfortable work environments, engaging in some non-billable fun time, and generally making the “work” easier not only builds a great culture, it will also reduce your costs in the long run.
Having a great company culture also reduces turnover. Having a place your employees want to work means they won’t be easily poached by competitors. Do you know how much employee turnover costs? Turnover costs include the costs of: interviewing and hiring a replacement, training, lost knowledge, increased unemployment rates, and lost productivity during the transition. That can get pretty expensive; it’s far less expensive to have happy employees.
There are many ways a good business culture can improve your profitability. Often the costs and benefits of business decisions aren’t easy to see on the income statement. Good financial management requires taking the initiative to see beyond the hard dollars and making decisions for the overall good of your business.