Wage Competitiveness: You may be worried about your ability to offer competitive wages if cash is tight. This can make it difficult to attract and retain skilled labour, leading to higher staff turnover and as a result, a less experienced workforce, which in turn impacts productivity, product quality and customer satisfaction.

Training and Development: Insufficient funds can also hamper your ability to investment in employee training and development programs. This can result in a workforce that is not fully up to date with the latest industry practices and technologies, reducing the company’s competitive edge and innovation capacity.

Sound financial management helps you offer competitive wages and invest in your team’s professional development. Thorough planning and a comprehensive three-way forecast, (Profit and Loss, Balance Sheet and Cash Flow), provide you and your management team with clear insights into the financial resources available for salaries, training and other staff related overheads, helping attract and retain skilled labour, reducing staff turnover and enhancing your productivity.

Tracking results and reporting performance against your financial plan, incorporating both financial and non-financial KPIs allows directors and management to make informed decisions about investments in people. Regularly reviewing your team’s remuneration, training and support requirements allows you to address any competence or skills gaps which will boost employee morale and productivity.

A robust management pack includes the following, essential information that is sadly missing in many cases:

1. A forecast and an up-to-date report detailing performance versus forecast, showing where the business is ahead and behind target profitability, cash flow and depending on circumstances, the calculated value of the business.
   
   
2. Tracking key non-financial KPIs in staff management, such as employee turnover, absenteeism, engagement, training, productivity, and health and safety incidents, is essential for optimising workforce effectiveness, satisfaction, and overall organisational health. For a more detailed summary, go to / Optimising Workforce Management
   
   
3. A summary status report from whoever is responsible for Human Resources (HR) should include an overview of progress on key tasks and highlighting any current or potential issues that may impact the business’ supply chain that require management attention.

With financial stability, you can afford to invest in your team and nurture your talent pool, leading to greater job satisfaction and lower staff turnover. This stability reduces the stress associated with managing your people, allowing you and your management team to focus on strategic goals. Improving work-life balance, with a more stable and productive workforce, reducing the day-to-day operational pressures on management.