As we ring in the New Year with hopes for a fresh start, it is more likely that businesses will continue to face many of the same challenges they have been enduring for the past two years. We are still in the midst of the Coronavirus pandemic, inflation is at a record high, and supply chain issues and labor shortages continue to impact many industries; however, with all that going on, business is booming! The New Year is an opportunity to change how we have been reacting to challenges and, instead, position our businesses to experience less disruption in order to take advantage of the overstimulated economy that has fueled demand. The following tips will help you evaluate operating processes so that your business can thrive in 2022.
The largest impact the pandemic had on businesses was to their workforce. From the outset, employers quickly realized that the health and safety of employees was of highest priority. Those that were able to stay open during the pandemic faced staffing shortages due to employees who were sick, in quarantine, or unavailable to work because of other pandemic-related issues. In addition, many businesses had to reduce or furlough their workforce due to closures and other mandates. As a result, workers were compelled to evaluate their jobs and make changes. Many did not return to the jobs and industries in which they were formerly employed, causing what is referred to as the “Great Resignation.” Businesses across all industries are struggling to retain and hire employees. If yours is among those affected, you have to position your business to be competitive by rethinking how it operates. Workers are at a premium and the pandemic has provided them with the power to ask for more and be selective when considering opportunities. Data from recent reports indicate that employers must reinvent their hiring practices and culture involving the following:
- Remote or Hybrid Workplace. It happened and it worked. Employers realized that employees were just as, if not more, effective working remote. In fact, many businesses have decided to stay remote rather than return to a traditional office model. Not only did going remote work for businesses, but for employees as well. They expressed less stress from commuting, were able to relocate to more affordable areas, became closer to their families, and felt more control over achieving work/life balance. This will continue to be a significant desire for employees of all levels when evaluating current and future employment. Businesses that offer some type of remote or hybrid workplace have a distinct advantage. What is preventing you from going remote? If a remote or hybrid workplace is not feasible for your business or industry, what can you do to compensate?
- Humanity. Treat your employees as individual human beings, not as cogs in the wheel grinding to reach production and financial goals. What are you doing to overcome challenges and keep your workforce connected and engaged? How are you acknowledging to your employees that you understand they are integral and important to the success of the business? How often do you seek feedback from your employees on policies and procedures that impact how they perform their jobs? People want to work in an environment where they are heard, appreciated and valued. When this happens, business goals are more achievable.
- Health and Safety. COVID is still a major concern. What is your company doing to ensure the continued health and safety of its employees?
- Compensation. The labor shortage has caused fierce competition among businesses needing to reinstate or grow their workforce. Employers have to work harder than ever to recruit and retain employees. Higher salaries, signing bonuses, enhanced benefits, and more PTO are factors being weighed and compared by potential hires. What differentiates your business from your competitors, particularly when it comes to hiring highly desirable candidates? What other benefits can you provide that will help with recruiting, while still staying within budget? How much are you actually willing and able to spend toward hiring?
INFLATION AND SUPPLY CHAIN ISSUES
It appears that inflation and supply chain issues will be hanging around for a good part, if not all, of 2022. Rising salary and material costs have put businesses in a precarious position. Unfortunately, in order to be profitable, or even survive, they must pass excess costs on to customers. This will cause competition to be tough and businesses will need to be more selective to ensure they get paid for the work performed and products sold. In today’s economy, businesses cannot afford to do work at “cost” or at a loss. During the recession of the early 2000s, countless businesses continued to provide goods and services at “cost.” Consequently, many of those businesses did not survive. At “cost” is trading a dollar for a dollar. Any hiccup will turn into a loss for your business. There is no upside to that proposition. Do a complete audit of your costs to determine pricing for your services and products.
CUSTOMER SERVICE: THE NEW COMPETITIVE ADVANTAGE
Over the past few weeks and throughout the holidays, I visited restaurants, stores, professional offices, and many other businesses. I noticed that the pandemic has become an excuse for poor customer service. Perhaps this is due to the physical and emotional exhaustion resulting from the health crisis and labor shortage. Perhaps businesses have been forced to keep or hire the wrong people just to stay open. Whatever the reason, keep in mind that the reputation of a business is hinged on its level of customer service. Don’t be fooled into thinking that customers have less options for where to do business. Competition is fierce, not just for recruiting, but for continued and new business as well. This is why I believe that the most important competitive advantage that a business, in any industry, can have in 2022 is to provide exceptional customer service. The following tips can help your business elevate its engagement with customers:
- ANSWER THE PHONE! Many businesses rely too heavily on automated phone systems and voicemail. Customers want to reach a real person quickly and easily rather than pushing a bunch of buttons, only to end up in voicemail and then waiting for a response. If feasible, have a live person answer the main office phone and direct calls. In addition, all employees, from executives down, should answer their phones when available rather than letting calls go to voicemail. Employees who are often away from their desks should have their office phone forwarded to their mobile. Isolation and uncertainty caused by the pandemic has people craving personal interaction. Hearing a human on the other end of the phone will make them feel more connected. Businesses that implement this policy will have a distinct advantage over their competition. I know this first hand. Price Kong recently picked up a new client because we were the only firm out of ten to answer their call.
- Return Calls and Emails Timely. Responding timely to calls and emails is critical. Failing to do so signifies to existing and prospective customers that they are not important. Poor communication is one of the top reasons businesses lose customers. Research how long it takes your employees to return a phone call or respond to an email. Do you lead by example? What processes are in place to ensure calls and emails are answered timely? Who manages emails sent through your website? Lack of response is currently a major customer complaint. Over the last couple of months, my firm has gained numerous clients due to the fact that we responded timely.
- Over Communicate. If you are in constant communication with your customers and they are kept up-to-date on the status of their account, they are more likely to be understanding should an issue or challenge arise. If an item is back ordered because of supply chain issues, be sure the customer is aware of all you are doing to get the product and when it is expected to arrive. If a job is delayed because of a staffing issue, let the client know your plan of action. Even if everything is running smoothly, a simple check-in will be greatly appreciated. A guaranteed way to lose a client is to let them think all is well and on time, only to find out down the road that there is an issue. Taking the few extra minutes to communicate can make all the difference in meeting your customer’s expectations.
To wrap up, all indications are that 2022 is going to be a strong year for businesses. Take time to review your policies and procedures so that you can position your business to take advantage of all the coming year has to offer. Find ways to attract and keep good talent, adjust your prices for inflation, and realize the competitive advantage of providing excellent customer service.
Contact me at [email protected] or 602.776.6344 to discuss how your company would benefit from a “Business Health Check-Up.” This process involves focusing on various aspects of your business, identifying strengths and weakness, implementing new plans and processes, and monitoring progress year-over-year. Best wishes for a happy, safe, and profitable year!
Gary Ross Dietrich, CPA, CIT, CCIFP
Ross Dietrich has over 20 years of accounting experience. He focuses on providing attest services, which encompass audits and reviews of financial statements, as well as compilations. Ross’s clients represent a wide range of industries, including construction, cannabis, financial, legal, governmental, closely-held businesses, and non-profit.
Click HERE for complete bio.
[email protected] | 602.776.6344
ABOUT PRICE KONG
Price Kong was established in Phoenix in 1967. Since then, our team has grown to 50 professionals and includes seventeen CPAs. The depth of our audit and tax practices allows us to provide services to clients in numerous industries, of a wide-range of sizes, and with revenues ranging from $1 million to over $500 million.
Price Kong is committed to providing personalized service and advice to our clients. Our full range of accounting and consulting services enables us to assist clients with understanding unique situation and ensure they receive expert support, regardless of the engagement or project. Price Kong is a member of Allinial Global, a consortium of 90 North American Certified Public Accounting firms, and numerous professional and industry organizations.