Company Culture

Inflation is high and the economy is down. Many American workers are overwhelmed by looming threats to their job security.

By the close of 2022, a surge of layoffs hit dozens of U.S. companies — from IBM to Capital One to Spotify — with no signs of slowing down. And employees holding on to their jobs report that their pay isn’t keeping pace with inflation.

A recent Society for Human Resource Management (SHRM) study revealed that nearly 48% of HR professionals are concerned about impending budget cuts, while 86% worry about how economic uncertainty may affect employees’ lives.

Says SHRM CEO Johnny Taylor, “Employers recognize that inflation has a major impact on the well-being of their team.”

What can you do to boost morale at your organization, despite all this uncertainty? Here are some tips to help keep your employees motivated and engaged:

Be honest. Employees don’t want false reassurances. Instead, keep the lines of communication honest and transparent, allowing them to feel a range of emotions.

Invite your team into the difficult conversations like navigating job cuts. Speak candidly about where your company is heading and ask for their input. They may offer some insight and visibility, presenting new ideas and opportunities you haven’t considered.

Show your support. Seventy-seven percent of today’s employees have experienced burnout on the job. A help little goes a long way. Be available. Check in with your employees regularly to lend your support and listen. Inquire about what you can do to better support them, and encourage them to take breaks.

If there’s a labor shortage, they may have an increased workload, as you’re forced to do more with less. Help them reprioritize their work to cut back on nonessential projects and focus on revenue-building initiatives.

Strengthen bonds. In trying times, do what you can to foster connections among colleagues. You don’t need to invest in employee lunches or happy hours. Instead, dedicate time for your team to talk about non-working matters.

At the beginning of your next team meeting, ask about weekend plans, share streaming recommendations or photos of your pets. Outside the office, consider organizing a team volunteer event where you can collectively work toward helping the local community. Bottom line, you’re all human and you’re all in this together.

Lead by example. Your employees are looking to you for guidance in how to persevere in the current business climate.

Don’t tell them, but rather show them through your actions. It’s important to demonstrate resilience in how you maintain perspective, and your team will be more likely to follow suit.

Success starts from the top

A Gallup study revealed that employees work 20% better when they’re motivated. But when they feel frustrated, discouraged and left in the dark, you can expect morale to plummet. Make sure your workplace is a safe and positive space for the people who keep your business humming.

While the future is uncertain, there are ways that businesses can restructure and recalibrate to best prepare for any challenges ahead. Learn how Magone & Company can help.

The way we do business is constantly evolving. And when you consider the current economic uncertainty, the rapid development of new technologies and the repercussions of a worldwide pandemic, you can expect 2023 to be a year of great change.

At Magone & Co, we expect to see the following trends emerge over the course of this year:

1. Combating the “Great Resignation.” Businesses continue to struggle with the aftereffects of millions of workers walking away from their jobs for more attractive working options. For employers, the challenge to keep and retain top talent is an ongoing trend as they strategize to offer the benefits, flexibility and work-life balance that today’s employees are seeking.
2. Keeping pace with digital transformation. As AI and automation augment the workplace, employers need staff that can support the transformation and work together in this new workplace reality. For example, employers may focus on hiring talent with specific skillsets that can’t be delegated to AI, like creativity and critical thinking skills.
3. Prioritizing the customer experience. Technology and customer experience continue to go hand in hand. That’s because in a saturated buying market, customer immersion has become essential in capturing customers’ attention. Technology can help create more immersive experiences by leveraging data to synthesize customer profiles for more precise personalization. The latest technology can even generate interactive ecommerce experiences with virtual reality (VR) platforms.
4. Overcoming inflation insecurity. Supply chains are still operating, and the economy is expected to keep growing, but businesses are still dealing with inflation. This means organizations must most monitor costs closely, minimize exposure to supply chain risks and have a plan to protect their margins.
5. Focusing on sustainability. Did you know that 79% of customers changed purchase preferences based on environmental impact, social responsibility and inclusiveness? An organization’s stance on social issues has become increasingly important to consumers and investors. That’s why having an environmental, social and governance (ESG) strategy can be effective in communicating a company’s core values and vigilance of the greater world, while meeting the ethical expectations of the audience.

When being “trendy” can improve your ROI…

With the majority of the year in front of you, take a fresh look at how your organization can benefit by incorporating these trends into your strategy. Need a trusted business strategist working on your behalf? Let’s chat.

Mid-size companies already say the labor shortage is their biggest issue, facing mounting pressure to raise wages, alleviate cost of living pain, provide flexibility, increase benefits and add training as options.

Now, rising gas prices and inflation add additional stress on wages. If you have growth plans, you can’t afford not to have the strongest possible team.

Let’s look at the latest statistics:

Unemployment remains at historic lows. The unemployment rate is  3.6% in May 2022. This is the lowest rate in the past 20 years — with the exception of February 2020’s 3.5%, which was the month prior to the pandemic starting.

Higher labor costs. Compensation costs rose 1.4% from December 2021 to March 2022, and 4.5% year over year ending March 2022.

Energy driving inflation. The inflation rate was 8.6% in May 2022, the highest 12-month increase in prices since December 1981. The 2021 rate was 7%, compared to 1.4% in 2020. The primary drivers of inflation are energy costs and transportation costs. These include electricity, gasoline, fuel oil and vehicles.

Looking forward, the Congressional Budget Office estimates a 3.1% real GDP growth in 2022; 2.2% in 2023, and 1.5% in 2024. Inflation is expected to be tamed to about 4.7% coming out of 2022, 3.6% in 2023 and 3.8% in 2024 — a little ahead of recent years, but not horrific. Unemployment is expected to remain in the 20-year-low category of around 3.7% through 2024.

Bottom line for your business:

• The economy is expected to grow
• Businesses will need labor to meet demand
• Unemployment will remain low, meaning businesses will need to compete for talent
• Labor costs are already rising slowly
• Inflation is driving up costs, primarily in energy and energy-related options

Workers will endure higher livings costs in the next year. Building your team will require you to find ways to alleviate that strain while rewarding top talent.

Here are three suggestions to compete in this market:

1. Flexibility is your first option. High fuel and transportation costs means work-at-home and flexible working arrangements are at a premium. If that’s not an option, you can encourage traditional solutions such as carpooling, mass transportation (possibly offering vouchers), and flexible in-office work hours to encourage commute times that do not hit the heart of rush hour. Key: If you can offer some relief from travel costs, you’ll reduce pressure on your team.
2. Compensation packages need to reward top talent. There’s going to be pressure to retain top talent. You’ll need line-of-sight to justify how competitive you can be — and clearly state to your team your expectations for performance. Also, clearly communicate the full value of the benefits package they receive to indicate total compensation.
3. Training is always a strong option. Companies that invest in their people will build stronger, more loyal teams. There are tremendous online training opportunities for staff to build and expand their skill sets — while giving your company additional deductions for business expenses.

A rule of thumb is compensation is determined by three equally important factors: individual performance, company performance and labor market itself.

The key for keeping costs down is to find ways to work directly with your team, building their skills and offering compensation that fits your budget and company performance.

With our forward-looking Business Advisory services, Magone & Co can help you identify the levers that will most impact your growth and success. Call us at 973-301-2300 now or request a consult.

We’ve all heard the stats — nearly a fifth of private businesses fail within their first year. After five years, 50% crash and burn.

But when you have a vision, a keen understanding of your environment and effective marketing strategies to draw in clients and prospects, you can set your business up for success in the long-term.

As a business owner of 30+ years, I’d like to share six secrets that stand the test of time:

1. Having a pulse on your industry. How well do you really know the environment in which you compete? What are the fundamentals, challenges, trends and threats? Are you keeping up or relying on dated knowledge? Information is at the core of every successful business — from accurately assessing customers’ needs to having the confidence to set and achieve audacious business goals.
2. Embracing your leadership role. Humility, honesty, integrity — these are just a few qualities of a strong business leader. Leaders know their people. They’re thought leadership experts. They can communicate their mission and inspire and motivate others to see the big picture. They can handle constructive criticism and feedback, taking action to build a greater organization. Or they’re wise enough to step back and hire more capable leaders. Which leads us to… 
3. Hiring wisely. Your organization is only as great as the people who embody it. And each function at every level requires a unique set of skills and competencies that must be met to run efficiently and successfully.Fulfilling your organizational goals starts with the right recruiting and hiring process. It continues with a deliberate, strategic plan for developing and retaining talented people.
4. Prioritizing process improvements. If your company hasn’t embraced SOPs and technology advances like automation and integration, you’ll never come out on top. Speaking from experience, these investments can be significant — but that doesn’t make them any less necessary. Without the research, tools and process improvements we’ve made over the last several years, it would’ve been impossible for Magone & Company to scale at speed and maintain a significant growth trajectory.
5. Making strategic marketing investments. “If you build it, they will come” is not a viable plan for growth. Many service industries have become increasingly commoditized, CPAs included. As the Magone & Company business model has morphed to stay ahead of the industry, we’ve invested in consistent, ongoing multichannel marketing efforts to showcase our thought leadership and effectively differentiate our services.
6. Overcoming fear of failure. Did you know that 33% of Americans have let fear hold them back from launching a business? Instead of stressing over all the scenarios that could play out, let them motivate you to work harder and work smarter. Anticipate challenges and how to mitigate them. Devise contingency plans if you don’t get the results you’re hoping for. If you make mistakes, learn from them and then move on to the next issue.

30 years and going strong

It’s hard to believe 30 years have passed since I’ve embarked on this venture. The next 30 years will likely be filled with new challenges and changes that will impact the way we do business. But what will not change is our unwavering commitment to help our clients achieve their goals and solve their challenges.

Don’t already have a trusted business strategist working on behalf of your organization? Let’s chat.