Business Education

Tired of New Employees Abruptly Quitting? Here’s a Novel Solution for Recouping Your Training Costs

One of the most costly and infuriating aspects of running a business is training new employees only to have them up and abruptly quit. It takes a lot of time, effort, and extra expense to onboard new hires and get them familiar with practices and procedures. When they depart shortly after their training, it means having to fill that position all over again. Since this is such a huge hassle and a costly one at that, some companies are actually billing employees who quit. The strategy is to ensure new employees don’t receive critical industry training only to leave and use their new skills at a competitor paying higher wages and/or offering more enticing benefits packages.

Companies Recovering Employee Training Costs through TRAPs

Healthcare, retail, trucking, beauty, and more companies are adopting a new approach in order to reduce their workforce losses. Known as Training Repayment Agreement Provisions or TRAPs, these clauses are included in employee contracts. Nearly 10% of all American companies are now using these provisions, according to a recent report by Reuters News.

When a valued employee quits, the loss can have a detrimental effect on the person’s team and department and maybe even on the entire company. Not only can an unexpected departure lead to lost revenue, but it also could lower the morale and productivity of remaining employees. —Society for Human Resource Management

Other industries may follow this emerging trend if it proves successful and legal. There are already federal and state government agencies looking into the practice, and it appears to be legitimate. If it continues to grow in popularity, it should be not only a big benefit to businesses but to employees as well, as both parties will know precisely what’s expected of them and how to proceed accordingly.

How to Use Employee Training Repayment Agreement Provisions

Because this is somewhat new, it’s very important to take thoughtful, measured steps in order to implement such a practice. Here are some suggestions for how to use an employee training repayment agreement provision in your business:

Consult a labor law attorney. The very first thing you should do is to speak with a lawyer who specializes in labor law in your state. Even if a future employee willingly signs such an agreement, there may be something on the books that does not allow you to enforce such a provision. So, be crystal clear it is legal and actionable in your state.
Speak with your human resources department. Obviously if you are able to include an employee training repayment agreement provision in your hiring contracts, you’ll need to get the right people in your organization on board and in the know. You can help to develop a new section in your training process that discloses and advises potential hires and new team member about this provision.
Make sure new hires are made fully aware of the provision. When you’re recruiting someone new to your organization, be sure this is made abundantly clear before you proceed with follow-up interviews and probably before the very first, initial interview. Any job candidate should be made aware of this provision well before you get deep into the hiring process.
Include a mechanism to recoup new employee training costs. Of course, you’ll need a way to actually recoup those training costs. So, if you offer a sign-on bonus, that may be one way to recapture the expense. Here again, you’ll need to consult an experienced, licensed labor law attorney in your state to establish a recuperation mechanism for the provision.

What else would you suggest business owners do to deal with new hires who quit shortly after being brought on? Please share your thoughts and experiences so others can benefit from your input! Interested in learning more about business? Then just visit Waters Business Consulting Group.

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How Small Businesses can Make the Best Use of Local Partnerships

June 16, 2022 No Comments

Small businesses often find it difficult to compete with larger businesses, not just in terms of scale and resources, but also in terms of visibility. However, by partnering with local businesses, small businesses can create an ecosystem where they can mutually benefit from each other’s strengths. In this article, we will explore four ways that small businesses can make the best use of local partnerships to improve their business. After all, this is one of the best and most powerful growth strategies available, and better still, it’s often just a matter of making the right arrangements. How Small Businesses can Make the Best Use of Local Partnerships The first way that small businesses can make the best use of local partnerships is by optimizing customers’ experience. Local partnerships give small businesses an opportunity to provide their customers with a more personalized and customized experience. By partnering with other local businesses, small businesses can offer their customers a one-stop-shop solution that meets all their needs. One of a small business owner’s most strategic, and potentially profitable relationships, is the one he establishes with fellow business owners. When business owners offer complementary services, they can form partnerships to help them reach new customers and expand the products and services they offer. These local partnerships help businesses increase their visibility and build customer loyalty. —Houston Chronicle Small Business Another way that small businesses can benefit from partnering with other local businesses is by using local partnerships to experiment with variations. Small businesses often lack the resources to experiment with different product offerings or marketing strategies. However, by partnering with other local businesses, they can test out different variations without incurring too much risk. Third, small businesses can create complementary offerings through local partnerships. For example, a coffee shop can partner with a local bakery to offer customers a discount when they purchase both coffee and pastries. This principle can also apply to a number of other businesses. So, co-existing industry peers, like in real estate, such as a title company and a mortgage broker, or a residential sales broker and an interior decorator can do the same. By partnering with other businesses, small businesses can offer their customers a more complete package that meets all their needs. Finally, small businesses can give and receive customer referrals through local partnerships. By partnering with other businesses in the same industry, small businesses can tap into each other’s customer base and generate more leads. In addition, by giving referrals, small businesses can build trust and credibility with their partners, which can lead to more business opportunities in the future. Local partnerships are a great way for small businesses to improve their business. By optimizing customers’ experience, experimenting with variations, creating complementary offerings, and giving and receiving customer referrals, small businesses can make the best use of local partnerships to improve their business. What other benefits do local partnerships offer? Please take a few minutes to share your own thoughts and experiences so others get the most out of these relationships. Interested in learning more about business? Then just visit Waters Business Consulting Group.

What to Do When Your PPP Money Runs Out

May 7, 2020 No Comments

What do businesses do when their PPP or Payroll Protection Program funds run out? While small companies can apply and receive relief, that money is only finite. It will go just so far before it’s gone. And, once it’s gone, it’s gone for good. Even organizations with business interruption insurance benefits have limited resources. Eventually, the cash will run out. So, what do small businesses do then? PPP Loan Forgiveness Only Solves One Problem It’s important to remember that PPP loan forgiveness — while most certainly helpful — merely solves one problem. Meaning, there are still other debts and obligations to pay and to meet. That alone reveals the fact there’s a lot more to doing business than just compensating employees. Vendors, contractors, and others also need to be paid. The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. —U.S. Small Business Administration This gets to the heart of the larger issue — the inescapable reality of the business world. Put another way, if someone paid off one of your personal debts and you had five, six, or ten more, while that’s a blessing and it’s appreciated, it does not get you totally out of debt. Businesses don’t operate that way because there’s always additional obligations. What to Do When Your PPP Money Runs Out Since businesses stay in a cycle of dynamics, with revolving credit and monthly bills, and they apply and receive PPP money, what can they do once those funds are gone? Here are a few suggestions that might prove helpful to your business: Offer invoice financing. Instead of requesting (or demanding) the entire invoice amount to be paid, give them the option to finance their outstanding balances. You can charge a small fee and/or interest rate — so long that it’s legal and ethical. Ask suppliers for extensions. For businesses that owe other businesses money, it’s worth a shot to ask for some more time or at least try to establish payment arrangements. This will help to take off a little pressure and to free up some cash. Review personnel staffing choices. Most businesses already have or will soon, be forced into this scenario — assessing which team members aren’t essential. It’s a tough spot but because employees most always represent the largest expense, this can’t be ignored. Consider liquidation or selling equipment. Another thing you can do is to sell off non-essential equipment, if available. Or, liquidate some inventory or materials. These are all difficult decisions but they could mean the difference between staying in business and going out of business permanently. Offer new services that are in demand now. Look at what services are in demand now that may be in line with your service offerings or a close extension thereof to provide immediate cash flow. Quickly shift to provide those services by promoting them to your current customer base and use social media to get the word out. Several industries and businesses have done this in recent weeks. What other suggestions do you have? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

Younger Workers No Longer Want to Become Managers – Here’s How to Get Them Interested Again

December 15, 2023 No Comments

Younger Workers No Longer Want to Become Managers – Here’s How to Get Them Interested Again The corporate world is undergoing a significant shift in employee aspirations. While climbing the corporate ladder and assuming managerial roles were once coveted goals, younger generations are increasingly expressing disinterest in this traditional path to success. This trend poses a challenge for businesses seeking to nurture future leaders and maintain a healthy organizational structure. Understanding the Root Causes: Why Younger Workers Shy Away from Management So, just what is happening and why is it happening? Well, there are a number of possibilities. But, there appear to be several distinct factors that have been contributing to the ongoing and declining interest in managerial positions among younger generations, which include the following: Work-life balance. Younger workers prioritize a healthy work-life balance, often viewing management roles as demanding and time-consuming, potentially leading to burnout and sacrificing personal well-being. Changing work values. Younger generations value autonomy, creativity, and making a tangible impact. Traditional managerial roles may not always align with these values, leading to feelings of dissatisfaction and a lack of fulfillment. Perceived lack of recognition and rewards. Younger workers often perceive managerial roles as offering limited opportunities for growth, recognition, and financial rewards compared to other career paths. Fear of failure. The prospect of taking on increased responsibilities and facing potential failure can deter younger workers from pursuing managerial positions. Lack of role models. Younger workers may also lack visible role models or mentors who can demonstrate the positive aspects of a management career and provide guidance and support. Bridging the Gap: Strategies to Motivate Younger Workers to Move Up the Ladder To address this challenge and encourage younger workers to embrace leadership roles, businesses can implement several strategies: Highlight the positive aspects of management. Emphasize the benefits of management, such as the opportunity to make a significant impact, develop leadership skills, and contribute to organizational success. Promote work-life balance. Demonstrate a commitment to work-life balance by offering flexible work arrangements, encouraging vacations, and promoting a culture that respects personal time. Provide opportunities for growth and development. Offer comprehensive training and development programs that equip younger workers with the skills and knowledge needed for managerial roles. Recognize and reward accomplishments. Foster a culture of recognition and reward, acknowledging and appreciating the achievements of both individual contributors and managers. Create a supportive environment Cultivate a workplace environment that fosters open communication, mentorship, and opportunities for younger workers to learn from more experienced colleagues. Additional Tips for Motivating Younger Employees Beyond addressing the specific concerns surrounding management roles, businesses can further motivate younger employees by: Empowering employees. Provide employees with autonomy and decision-making authority, fostering a sense of ownership and engagement. Encouraging creativity and innovation. Create an environment that encourages creativity, innovation, and risk-taking, allowing younger workers to contribute their fresh perspectives. Providing opportunities for meaningful work. Assign employees to projects that align with their interests and allow them to make a tangible impact on the organization. Offer useful and constructive feedback. Provide regular, constructive feedback that helps employees develop their skills and advance their careers. Promote from within. Demonstrate a commitment to internal promotion, allowing younger workers to see their career path within the organization. By addressing the underlying reasons for younger workers’ reluctance to pursue management roles and implementing strategies to foster a more appealing career path, businesses can revitalize the interest in leadership positions and cultivate a pipeline of future leaders who are both motivated and equipped to take on the challenges and rewards of management. Do you want your company to grow faster and earn more while you spend more time with your family doing all the things you love. Isn’t that why you started your business? We can make that dream a reality. Give us 30 minutes and we will show you how to get your life back. Skeptical? Good! Put us to the test. Call us for your free appointment at 6024355474, or send us an email. Or, visit Waters Business Consulting Group to learn more about us and the services we offer.