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The Secret To Neutralizing The Labor Shortage
With jobless claims at its lowest rate in over 50 years, virtually every industry is suffering from a labor shortage, and electronic systems integrators have not been spared. The pundits point to a variety of causes, but in fact the labor shortage is most likely a symptom of what is being referred to as “the mother of all recoveries” stoking the economy. GDP growth is at its highest in nearly 40 years and, according to the US Congressional Budget Office, economic growth is expected to continue compounding at an unprecedented rate of 4.0% for the next nine years.
In other words, this labor shortage isn’t going away! So, if you accept the reality that finding candidates to hire is challenging, expensive, risky…and unlikely, what options are available for system integrators faced with uncomfortably high and growing demand?
Well, if you like the current size of your business, an obvious way to taper demand is to raise prices. In these inflationary times, everyone’s doing it! It’s de rigueur…or “trending”. And the side benefit of chilling demand by raising prices is that profits will increase dramatically since fixed and variable costs remain unchanged.
A better option for those who want to “ride the wave” for the next several years is to focus on increasing output and project throughput, using your existing team. How, you ask? By focusing on (1) improving employee engagement and morale, (2) creating and operationalizing best practices, and (3) exploiting productive tools (i.e. software), the combination of which can result in a 20-30% increase in productivity and project throughput without expanding the size of your team.
Employee engagement and morale. Are you getting the most possible out of your team members? Of course not. You may be getting 95% out of a few, but I bet you’re only getting 60% out of others. The Gallup organization’s employee engagement assessment tool, Q12, is a quick (12 questions), inexpensive, anonymous, and easy to administer tool for understanding your team’s level of engagement, and will provide some guidance on the areas that need further attention.
Despite what you uncover by conducting an assessment survey, there are several things that are guaranteed to improve team morale, engagement and ultimately output and productivity. Start with alignment around strategic goals and initiatives. Do you have a strategic plan? Have you shared it with your team? Doing so gets your team on the same page and rowing in the same direction. It creates alignment and a sense of purpose, which is a critical first step.
Once the team understands where the business is headed (strategic plan) and is provided a guide for how to get there (strategic objectives and initiatives), it is imperative that the team works well together in pursuit of those goals. Creative team building exercises (or better yet…experiences, especially for Millennials) help employees get to know one another better, expose strengths and weaknesses, and create a more intimate work environment where team members feel more connected and want to support one another.
Lastly, take the time and make the effort to show your appreciation to those who are performing their duties well, or even just doing their best. Support their efforts through training, coaching and encouragement. Take a personal interest in their lives, and get to know their families. Show gratitude for your team’s efforts. This sort of soul-revealing behavior will not only create loyalty, but a desire on the part of your staff members to work harder to help achieve the company’s goals. Work ethic and personal output will improve, often immeasurably.
Best Practices. Successful implementation of employee engagement tactics gets your team more aligned, engaged, connected, and focused, but do they know HOW to do their job in the manner that derives the best and most consistent results? This is where best practices come into play. Simple things like standardizing meeting days/times, cadences, agendas, and formats can go a long way towards creating a consistent and predictable working environment. Similarly, standardizing on communication tools and protocols keeps information flowing so team members are always suitably informed. Then, standard operating procedures (SOPs) need to be developed to tell employees “this is how we do it here”. Think of SOPs as step-by-step guides, shared across departments, that inform employees what tasks need to be completed, by whom, and in what order for all major (and eventually minor) functions of the business.
Productivity Tools. Once best practices are developed, software does an amazing job at enforcing and automating those processes. Many system integrators have invested in industry-specific software solutions, but few exploit the full power of these tools. As a result, productivity gains may only be marginal. Those organizations that have taken the time to understand the software’s capabilities, set it up optimally, train their staff fully, and implement across the organization will tell you that it is the best business decision they have ever made. The productivity gains are enormous.
If you truly want to increase employee output and project throughput in significant ways (i.e. 20-30%), the following recommendations will help achieve those objectives.
- Don’t treat software like hardware. In other words, avoid evaluating software every year or two, as you might with the hardware solutions you sell. Software implementations are time consuming and can be disruptive to your day-to-day business. So, I encourage you to stick with the solution you choose for at least 5 years.
- Choose an industry-specific, end-to-end software solution that best meets the needs of your business. (No solution is perfect, so simply go with the one that seems like the best fit.) Take the time to understand it’s capabilities fully, set it up in a manner that optimizes its use within your company, train your staff fully, and implement it across the entire organization. If this comprehensive approach seems unrealistic, then simply choose your most obvious bottleneck or pain point, and solve that first, and then move onto the next business challenge, and so on until the software solution selected is being taken advantage of in all critical areas of the business.
- Take the steps necessary to avoid double data entry. Virtually all software solutions have the ability to export and import data. If the data resides in one software solution, it can likely be transferred to others, improving operating efficiency and eliminating the risk of human error. For products that need to communicate bi-directionally, an API integration is recommended.
- Lastly, establish active communication with your software provider. Presuming other software companies have the same mindset as D-Tools, we are always looking to improve our products and services, and actively incorporate feedback and feature requests into future releases.
When demand is high and your team is working on overdrive, it is understandable that the first inclination is to recruit, hire and grow the size of your team. But with the labor shortage being here to stay, business owners need to get creative. Focusing your efforts on the combination of improving employee engagement and morale, creating and operationalizing best practices, and exploiting productive tools can increase staff output and project throughput by 20-30%, which in many cases will neutralize the need to hire (at least for a period of time).
I acknowledge that this recommended approach may seem overwhelming when your team is already feeling overworked, but consider the time it takes to recruit, interview, hire and train new employees. Instead, redirect the time it takes to find and train new employees into the less time-consuming task of improving employee engagement. With a more engaged staff, they’ll be excited about helping develop best practices and automate those processes using the productivity tools available to them. Before you know it, you’ll have a well-oiled machine…and your bottom line will have tripled since you managed to grow the top line without adding staff.
– Randy Stearns, D-Tools CEO