How to Improve Business Efficiency and Grow Your Company
Knowing how to improve business efficiency is a key factor in any company's strategy for growth. When inefficiencies exist, productivity can suffer, creating a ripple effect throughout the organization that can impact leadership, employees, and customers alike.
Efficient business practices are less about what you do and more about how you do it. Here are some "big-picture" ways to help maximize your resources and execute business functions more efficiently.
Use free resources. There are many valuable free resources for businesses that you can turn to when you need it. National organizations such as the U.S. Small Business Administration and SCORE provide advice and resources that offer guidance on startup issues, tax concerns, and in some cases even legal matters.
Invest in quality branding. Having a cohesive brand is invaluable in presenting a clear message to your customers, vendors, key stakeholders, and the public. All aspects of your branding — from your company logo to your website layout and product offerings — must be consistent with the message you want to send to your target audiences.
Think from your customers' perspectives. If you asked customers, "How can we improve our business?" How would they answer? Details about your business might seem obvious to you, and therefore unnecessary to mention in your sales and marketing materials. But if you approach this from your customers’ point of view, you may think differently. Productivity improvements start by looking at your business from a potential customer's point of view. Ask for outside opinions to avoid making business decisions based solely on a personal bias.
Outsource key business tasks. Business owners often wear many hats, from leader and recruiter to designer and payroll administrator. Often, knowing how to improve business performance starts by recognizing that no one person can do everything on their own.
Consider outsourcing complex tasks that are integral to your business, but aren't necessarily within your realm of expertise. Bookkeeping and accounting, for example, don't often fall within a typical business owner's area of expertise. Still, it's an essential part of business efficiency. A skilled outsourcing firm can balance your books much quicker and keep you up to date on financial data that helps you plan for the short- and long-term growth of the business.
The role of analytics in improving efficiency
HR is another business operation where efficiency is imperative. Specifically, the process of employee recruitment and retention is simply too important to leave to chance.
HR analytics can provide human resources departments with better data collection, reporting, and the information needed to make data-driven business decisions. Whether a business unit manager needs the latest information on time and attendance to streamline their scheduling process, or a quick payroll audit by the HR manager to address a problem, analytics help make data accessible to business leaders.
Here are some ways to leverage HR analytics and improve the way you run your business:
Recruiting. When a job candidate is brought on board but ends up not being right for the position, turnover can happen, and filling open positions becomes expensive and time consuming. Recruiting analytics lets you see where your best candidates come from and which profiles tend to succeed more often over the long term. In addition, analytics can help clarify how your recruiting process is working and where there might be room for improvement. For example, if analytics show delays in candidate communication or long review times at the hiring manager level, this can provide actionable insights for making process improvements.
Time and attendance analytics. With time and attendance analytics, companies can determine the most efficient patterns in employee scheduling, to strategically manage the scheduling process, stay in compliance with company and regulatory processes, and even identify patterns of absenteeism that could signal trouble at the individual or department level.
Benefits and other services. HR data analytics can streamline the management of benefits and other services within human resources. Consider the reporting needed during open enrollment. An analytics-driven reporting system makes it easy to see who is enrolled and where decisions are pending. Analytics can also help HR managers understand which benefits are being, and which ones may be underleveraged.
Common payroll mistakes that can lead to errors and inefficiencies
Payroll processing is a particular company operation where accuracy and efficiency matter. As just one example, businesses must submit taxes to federal, state, and local authorities, at specified times and in designated forms. Such demands require time-consuming administrative efforts which, if mishandled, can lead to costly resolutions. Some of the most common payroll errors include:
Filing late with the IRS. The IRS stipulates specific due dates for depositing taxes and filing returns. Late deposits and late filing of payroll tax returns can result in penalties and interest charges.
Errors on tax forms. Errors made on tax forms may make it appear that you have remitted too much or too little in payroll taxes. Such mistakes can also impact reconciliation with other tax forms e.g.W-2s.
Misclassifying employees. You must take the appropriate steps to correctly classify each worker as an employee or an independent contractor. Misclassifying an employee as an independent contractor can result in retroactive payroll tax liabilities as well as fines and penalties.
Processing payroll late or not at all. Late or inaccurate payroll processing not only creates unhappy workers, it may result in issues like missed premium or investment payments which will take additional resources to rectify.
Paying the wrong amount. Incorrect data entered in a payroll database can result in problems connected to employee information, tax withholding amounts, and payment information. Corrections can be time consuming and can wreak havoc on your bottom line.
Not maintaining adequate payroll records. State and federal regulations mandate businesses keep specific employee records. Some local and state jurisdictions may vary in their recordkeeping requirements, so employers must be familiar with such requirements in the location(s) in which they do business.
Outsourcing payroll leads to productivity improvements
Outsourcing payroll processing is a solution to both enhancing efficiency and helping to reduce your risk of the aforementioned payroll processing mistakes. Among the key benefits:
More time for business priorities. Regardless of your business or industry, if you have a workforce, attending to payroll-related matters consumes a serious amount of valuable resources. One pay period follows after another (without interruption), a constant demand for time and energy spent ensuring that employee data is input correctly — and then reviewed for accuracy.
The complexities of payroll processing require a significant amount of time committed on a daily and weekly basis. Although business owners are ultimately responsible for meeting payroll accuracy and filing requirements, having a provider on hand often saves a great deal of time and helps them feel more confident about staying up-to-date on regulations.
Guarantee integrity of confidential employee and company data. Data theft and breaches are all too common today, and payroll processing represents a potentially risky area for your company. Threats include identity theft, employees tampering with company records, or even embezzlement. The use of in-house payroll processing software is not risk-free, either.
By contrast, a trusted outsourcing vendor has information security controls designed to safeguard sensitive data. Together with redundant backup and multiple server locations, a quality provider invests in state-of-the-art systems for storing and protecting data, simply because it's part of the service provided to clients.
Stay current with tax and employment laws and regulations. Every business owner must comply with federal, state, and local tax and employment regulations — or face stiff financial (and possibly legal) penalties. An outsourced vendor who specializes in payroll processing has the knowledge to help you with those responsibilities.
Outsourcing HR functions boosts efficiency
Outsourcing HR functions can result in a significant improvement in business efficiency. A skilled outsourcing company helps mitigate the risk of noncompliance with current reporting and filing requirements, as well as assisting with development of worksite safety programs, and insurance benefits.
More small businesses are investigating the merits of entering into an arrangement with a professional employer organization (PEO), which enables business owners to outsource management of employee benefits and related areas, including these key tasks:
- Creating an employee handbook
- Building job descriptions
- Assisting with regulatory and legal compliance issues
- Maintaining Affordable Care Act documentation
- Providing comprehensive online HR resources
- Offering onsite employee training
- Helping with risk assessment
Outsourcing other key processes — such as marketing, website maintenance and social media activity — are worth looking into as well. The more you can outsource to a reliable service or company, the more time you have to concentrate on what will contribute to the growth of your business in 2019.
Personal and professional efficiency hacks
It's not just your business that stands to benefit from greater efficiency. Every business owner and leader can improve productivity with "efficiency hacks" that can include:
Setting the right goals. Big goals usually have too many moving parts to handle at any one given time. Envision goals you can reach in a manageable way.
Completing one task at a time. Productivity can easily be wasted when you jump between tasks and try to figure out where you left off.
Prioritizing. Create your daily task list in order of importance. Get important tasks done first before interruptions take your focus away. And avoid putting anything off. Do it right then and there, if you can.
Managing your time well. What times of day are you most productive? Tackle difficult tasks during the time when you have the most focus, and dedicate other times for less demanding tasks. Consider working in 50-minute blocks with short breaks in between.
Reducing distractions. Email can be a huge time drain. Consider limiting your email activity by scheduling time every couple of hours to check it and stick to it. Similarly, schedule phone time to make or return calls, and shut your cell phone off during your planned work blocks.
Knowing how to improve business efficiency helps everyone in the organization. As part of the process, learn more about how you can help your employees increase efficiency by more effective-goal setting to increase productivity and engagement.