You want higher profits and happier employees but getting both may seem impossible. The relationship between firm financial success and employee happiness is not always obvious, but higher profits enable investment in staff and systems that in turn, makes them enjoy their jobs more and creates even higher profits. This connection ensures continued firm growth and success.
So, what is the secret to having both higher profits and happier employees? Here are five key areas to increase operational efficiency, build happy teams, and gain a competitive edge so you can grow your business.
1. In order to have high profits you need great clients and projects and to charge the highest fees possible. This requires an excellent strategic plan and an intense focus on staying true to it. Many firms do an offsite strategic plan every year or few years and then get so busy with their day to day work that they don’t accomplish the critical internal initiatives that they had committed to in their planning sessions.
It is also important to share your plan with your staff so they can pursue projects that are in line with the strategy. Middle-level management often pursue jobs that are awarded on price, and this practice guarantees your profits will be in the low to average level and not the high level of profit margins in the industry.
Also consider that low budget jobs are not fun to work on. There is a lot of pressure on your project managers to keep them on track and the level of detail, quality and attention will need to be sacrificed to work for low fees. Employees are happier and stay longer when they feel appreciated by great clients.
2. Your employees want to have a voice in your firm. This is not a traditional way to operate an A&E firm, but the more progressive firms are recognizing that times have changed, and employees can have valuable ideas about how the business can run better. Your staff want and need to be recognized, valued for their opinions and ideas, and shown that they are a trusted team member.
If employees are kept in the dark about what is going on, if key financial information is not shared with them, or if they are not asked for feedback about how the firm can run better, they will be frustrated and not feel trusted. When you ask your team for feedback and provide them the skills to excel at the business side of their job (see #5 below), you will experience less resistance, more motivation, and ultimately, happier employees. This will lead to increased retention and less drama. Your employees might even come up with some great ideas that will improve the bottom line!
By showing your staff that you trust them, they will be more loyal and stay longer. It is that simple.
3. The third key is creating new and better business best practices that will make your employees’ jobs easier and more enjoyable. Sometimes they are called processes, but employees respond better to the term best practices.
What your employees do every day is critical to your firm’s success and profitability. When everyone has developed their own ways of doing things and created spreadsheets so they don’t have to use your systems, you will not have good data to make decisions and both sales and cash flow will suffer. Consistent best practices ensure that the best way to do something is ingrained in their daily behavior.
Once you have received feedback from your team about where they are struggling and how the business can run better, you will be able to develop better best practices and improve systems. Because ideas for improvement come directly from your employees, they are more likely to embrace new processes and systems, and less likely to resist. Also, they will be happier because they won’t be frustrated with time wasting processes and cumbersome systems.
4. Accountability is critical to a high performing team. The process of setting goals, measuring, reporting, meeting to review progress and having clear rewards and consequences is essential to profitable growth. Many leaders mistakenly think that accountability corresponds to punishment, and they avoid it thinking that their employees will respond negatively. However, studies find that high performing employees’ welcome accountability and get frustrated when those who are not performing are not held accountable.
Even if your firm has the best practices and excellent systems in place, if your team is not incentivized and trained to use them, their performance will suffer.
Implementing a culture of positive accountability can be very advantageous to a firm that expects and rewards high performance. In order to hold employees accountable, ensure they understand the goals and how they are being measured.
5. The fifth key to guaranteeing high profits and happy employees is to ensure employees are focused on helping the business succeed. Most employees do not understand the connection between their timesheet and their paycheck. When employees are trained to have business skills and understand how the firm makes a living, they will be more productive and motivated to help your firm increase profits.
To stay motivated, they need to know the “why” behind everything they do every day. This also connects the dots and makes them feel more like part of a successful team. Having a foundation of business acumen and a solid understanding of firm metrics will ensure that they can stay motivated and focused on helping the firm achieve its financial goals. It also makes it easier to hold them accountable.
Implementing the five keys above will accelerate your business results to achieve high profits and happy employees. In less than a year, your firm can be transformed to a business-focused culture that embraces employee contribution and ideas and elevates your firm to the top of the industry in financial results and employee retention.
AEC Business Solutions has developed a proven program that transforms employees’ mindsets and behaviors and refocuses the culture of the firm on business excellence so that leaders can easily grow their businesses and profits and focus on doing what they love most – working on great projects.
Cash is King Webinar
Managing Cash Flow in a Down Economy
Date: Wednesday, August 19th, 12:00pm ET
The average days to collect cash in the AEC industry is between 60 to 120 days. In this web training we will examine the complete project lifecycle to understand how cash flow can be increased when the economy is uncertain. Participants will gain valuable tips to improve cash flow by improving timesheet practices, reducing the billing cycle, and improving client relationships and collection practices.
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