In today’s business environment all organizations are under tremendous pressure to do more with less. Businesses and Governments at all levels are held accountable by their stakeholders to reduce cost and improve their operating margins. Municipalities are under pressure from their citizens to minimize tax increases yet they face increasing costs for the services and infrastructures that are provided by their employees.
Employees are expected to get better and develop new skills just to stay on top of ever increasing expectations which creates an expectation for higher compensation levels. More and more organizations have to limit wage increases just to keep costs from escalating out of control, especially those where wage costs account for a large percentage of the total expenses. We just have to look at the cost of our health and education systems and the pressure that increasing wages has on provincial budgets.
So what can be done to ensure employees are compensated fairly for the work that they do and still deliver on the expectations of minimal year over year cost increases?
It is incumbent for the leaders in all organizations to focus on the following;
- Eliminate any work that is not adding value to the organization or the clientele that they service
- Simplify required processes so that customer service expectations can be met with the minimum amount of resources
- Provide your employees with clarity on what is expected from each of them to help the organization succeed
Organizations which strike the right balance between compensation increases and continual productivity improvement such that the unit cost for wages continues to decrease will have a sustainable future.
In my next blog I will share some thoughts on how these three principles could be applied in our education system.