Small to mid-size businesses were thrown for a few loops in 2016. The implementation of the Affordable Care Act (ACA), a presidential election, and a constant stream of new labor laws kept business owners on their toes. If you were looking for a break in 2017, you’re probably not going to get it.
Due to the potential repeal of the ACA and increasing turnover rates, a survey by Wasp Barcode Technology of small to mid-size businesses (SMBs) in the U.S. reveals that hiring new employees ranked as the top business concern of SMBs in 2017, followed by increasing profit, and employee healthcare. Business owners will want to be aware of trends and changes if they want to be prepared for and find success in 2017. Also, while over-regulation wasn’t one of the top three for 2017, it was ranked as the top concern of CEOs in 2016 by Forbes, and it should still be something business leaders keep an eye on for the upcoming year.
When it comes to growing a business, hiring the right employees and retaining them is perhaps the number one ingredient for success. Compdata reports that in 2016, the national average employee turnover rate was 18.1%. This is an increase of 2.5% since 2014. If the trend continues, then 2017’s turnover rate will be close to 20%, meaning about one in five employees may end their relationship with a company this year.
When you combine a high turnover rate with a talent shortage, replacing employees will be a critical concern in 2017. Businesses should focus on hiring for retention, improving the onboarding process, and building strong company cultures. Easier said than done, but fortunately, there are solutions for streamlining the onboarding processes as well as helpful technology that can improve employee engagement.
There are many ways to increase profit, but one of the most straightforward is to decrease expenses. While generating greater revenue can be a factor of increasing profit, too often business leaders miss the important counterpart, which is containing costs. Is your business one of the many that is spending thousands in unused employee benefits or overlooking small errors on insurance carrier bills resulting in excess charges?
Perhaps the greatest expense any business has is its employees. When you calculate the costs of training, healthcare, retirement, and more, even minimum wage employees can consume a large portion of a company’s budget. When looking to hire new employees, consider outsourcing first. For example, according to Business Management Daily, a company should have one HR personnel for every 100 employees. Before that mark, in-house HR may be an unnecessary expense that should be outsourced.
The best way to increase profit is to streamline organization and invest in service, sales, and product development while reducing administrative work. Outsourcing provides one of the best outlets to achieve that ideal.
The average health plan cost per employee is around $6,881 for medical coverage only. With the implementation of the ACA, and for numerous other reasons, the cost of providing competitive healthcare to employees is increasing with each passing year. As costs increase, employers may opt out of providing healthcare as a part of their benefits plans. Now with the ACA about to go through a potential makeover, the future of employer-provided healthcare is looking uncertain.
With new labor laws and updates to existing ones, it is no surprise that CEOs viewed over-regulation as a threat to business growth in 2016. And, according to Wasp Barcode Technologies survey, roughly 50% of SMBs say that the government is not doing enough to support them. With anxieties about over-regulation and a belief that the government gives more burdens than aid, business leaders will find that staying current with legislation is going to require hours of administrative work and readjusting processes to stay compliant.
While the anticipated challenges of 2017 can cause anxiety for business leaders, those who prepare in advance can reduce the burdens that are placed on them. Take some time to consider new strategies for approaching 2017 that will help scale your business by retaining your workforce, reducing costs, and remaining compliant with labor laws.
About the AuthorMore Content by Andrew Larsen