Driving Productivity to Grow Revenues
For an employer of seven staff or more on an average wage of £30k per year, National Insurance costs will be rising from April 2025. Increased National Minimum Wage will impact several industries across the UK. Mitigation for SME businesses won’t be simply to increase their prices, or they risk becoming uncompetitive. The answer will not just be to reduce headcount, after all most businesses are running fairly tightly on resource at this point in the economy.
Following on from his series of articles last year, focussing on Performance Management to get the most from your staff (starting with Change Your Mindset), Martin Nicholson discusses that the solution must be a combination of both pricing and costs, by driving productivity to get the most from both.
Start Focussing on Productivity
Greater productivity can come in many forms. It could be technological, with the advent of AI and software systems enabling a less resource-hungry business service. It could also be in the simple efficiency of the team you employ and their motivations.
Let’s explore four scenarios where increasing the capability both in behaviour and skillset – whilst driving motivation – would lead to potential upside and could (should!) more than make up for the increasing costs;
Customer interaction in a retail store
Ensuring that all customers are greeted in a small retail organisation, and a good depth of knowledge on products and their field, should drive up retail sales.
Do all of the team know the product attributes? Are they skilled at interaction with customers? Can they describe the value of the product and/or offer alternatives and complimentary additional products?
Even if they have the skills, do they have the confidence and motivation to deliver such interactions? You don’t want your staff to just be filling the shelves – they are front and centre to create a welcoming environment where customers trust their knowledge and make your business first choice every time.
How many additional sales – which may well repeat – would it take to cover the additional costs?
Call centre staff having a “WOW” effect on the caller
Yes, service does cost. But the loss of customers costs a whole lot more, doesn’t it? If you can’t differentiate on service or price, could you be the best service provider?
How can staff in such an environment find small wins to delight the customer? Without the empowerment to deliver those wins, why would they even think about them?
Your team need empowerment, motivation and skill to deliver 5-star results, but is it the management culture in this case that stops the customer rating you 5-stars? Productivity shouldn’t just be about the number of calls that get answered, and how quickly. It should also be about great customer service, and leaving enough of an impression on the customer to get that 5-star review.
Would regular 5-star reviews lead to more business?
Could fewer lost customers, plus more new business, actually lead to a more profitable business despite increased costs?
Successful service business, but is the owner the only salesperson?
Does every one of your team think about new opportunities and seek to find new ways to win customers? If not, why not?
Are they engaged? Do you set targets? Do you create competitions? Do you share your new business wins and your losses? If not, why not?
It’s OK to engage the whole team in this process. Ask them on a regular basis for their thoughts on how to win more new business.
There doesn’t have to be a monetary reward. Encourage involvement and engagement. Seek their advice and that might lead to them thinking about new customers – and not just at work, but in the pub, when round a friend’s or at the sports club. As the business owner, you probably see almost every social interaction as an opportunity to network. How about if your team did the same?
Making this everyone’s subject, and encouraging people to think like they own the business, is critical. Increase sales productivity by making your whole company your sales force.
Would one sale per team member offset the increased cost of staffing in 2025?
Marketing activity to grow your leads
So you deliver x marketing activity each week.
The team you employ to do it could – through goals – develop the process, making it more efficient. Using new software, automation, finding ways to repeat and re-use, could achieve x +10% without additional work.
If x drives your revenue presently, then x +10% could drive a 10% growth in revenue (as long as the Sales team can keep up!).
Are all of the team you employ encouraged to find new ways of working, making their role more efficient and increasing productivity?
If their role is more efficient, have you reset targets? Have you spoken to your team and got their thoughts on how much more they could deliver? Have you assumed they are busy? Have you challenged what busy looks like?
You might be surprised to find, simply restating objectives might lead to an upsurge in results.
At ProAction HR, we firmly believe that a strong Performance Management process is key to increasing productivity in your workforce, whatever industry you’re in. We’ve put together a FREE Performance Management Checklist to help you identify where you can improve (or implement) processes to get the best from your staff.
What can we do for you? - please get in touch for a FREE discovery call.
Martin Nicholson is the Managing Consultant at ProAction HR, providing Human Resources Services to SME businesses in Southampton, Winchester and throughout Hampshire and the adjoining counties.
Co-founder of the Winchester-based HR company, Martin and his team support clients across Hampshire and neighbouring counties, providing HR advice, HR consultancy, and HR services. They cover a broad range of HR solutions, from one-off responsive HR support to a full Human Resources service, along with Learning & Development, Training and Change Management.
“Helping organisations to thrive on the value & uniqueness of their people.”
