You can use employee engagement to create relationships between your business and employees. Employee engagement is when employees are committed to your company and the work that they do. You need to have an active role in making employee engagement possible. The benefits of employee engagement help your company on many levels, including your accounting.
Accounting benefits of employee engagement
Here are three ways engaged employees can improve your bottom line:
1. Lowers costs
Employee engagement begins when someone applies for a job. If you don’t engage quality applicants from the start, you could end up hiring employees that are not a good fit for your business. This causes a higher employee turnover rate. A high turnover rate costs you money.
The more frequently you replace employees, the higher your overhead expenses are. You spend money on advertising the position, use billable hours for interviews, and pay administrative costs for each new hire. Slowing your turnover rate can help to pinpoint and even decrease the answer to your question, “how much does an employee cost?”
2. Increases profits
An engaged employee is more likely to increase your business’s revenue. In fact, businesses with higher employee engagement levels see 22% more profitability.
The idea boils down to this: When you have reliable employees that come in ready to work, your business is more productive. As a small business owner, you know that productivity is vital for making profits.
Engaged employees take the time to learn your business, build customer relationships, and meet goals. These actions reflect your employees’ drive to reach higher profits.
3. Cuts down mistakes
Accounting mistakes can cause huge problems for your business. A mistake in one part of your business can have a domino effect on the other parts. For example, if receipts are lost at the point of sale, a small business owner trying to close the monthly books could be in for a headache.
Engaged employees can help prevent accounting mistakes. They perform their tasks correctly to prevent the domino effect from reaching your records. When employees diligently handle inventory and cash, your records are more likely to be accurate.
Conscientious employees can also assume responsibility for routine tasks, and free up time that you can instead use to keep up with your accounting. You won’t have to worry as much about the small, day-to-day details of your business. Committed employees can handle tasks on their own.
Reliable employees mean fewer surprises. You can focus more on growing your business instead of fixing mistakes. Order helps keep your accounting on track.
Employee engagement tips
As a small business owner, you need to take steps to encourage employee engagement. You can do this by:
- getting employees involved with company activities, events, and projects
- showing that employees are appreciated by rewarding achievements
- encouraging learning and training opportunities so employees can grow with your company
Find employee engagement methods that fit for you and your company. That could mean celebrating an accomplishment or implementing a new-hire training program.
You can create employee engagement in big or small gestures. Consider the benefits of employee engagement for your accounting as you find new ways to connect with your employees.
Want to watch your accounting improve with employee engagement? Patriot’s small business accounting software is a simple way to track transactions. Try it for free today!
This article is updated from its original publication date of March 1, 2016.This is not intended as legal advice; for more information, please click here.