Resolve to invest in training your staff. Your investment could prove more cost-effective than marketing.

One of the hardest parts of running a business is finding good employees. Many businesses are willing to accept less than quality work from employees, because they are concerned that if they were to terminate the problem employee, they might not be able to find a suitable replacement. In the current economy, this is less likely to be true.

The logic is, poor work is better than no work at all. And to some degree, you can’t argue with this thought process. There are, however, three options beyond accepting this problem as simply being a part of doing business.

The first option is to hire the better employees away from your competition. The idea will work, but there are several questions that we anticipate. The first is to determine which of your competitor’s employees are of a quality that you would want to employ. Don’t expect to gather this information from the sales reps that call on you. As soon as the sales rep starts doing this, he will find himself an unwelcome individual in other businesses. If a customer would pass this type of information to you, don’t you have to wonder why he is coming to your shop and not utilizing this excellent salesperson? About the only way this idea could work, would be to hire mystery shoppers, which could get expensive.

The second option is to fire the problem person, put a sign in the front window, an ad in the newspaper, and then begin the business owner’s prayer: “Oh Lord, I hope this new person works out better than the last.”

Option number three does really seem to be the only logical alternative: educate the ones you have. Let me give you a couple of bits of information to back up this option. As an average, for every $65 that a retail business will spend to advertise to customers, they spend only $1 to train their employees.

The problem is that we have done nothing to distinguish ourselves from our competition; not in the eyes of our customers and not in the eyes of our employees. From over 25 years of experience, I can tell you that any merchant who will spend one hour every other week with his employees will do more to increase his sales and profits, than he could accomplish with any advertising.

Often time, the hard part of the education is convincing the existing, and especially the long-term employees, why you are going to do it. The question that they are asking is not, “Why?” but “What is in this for me?”

Use expertise of senior staff
You need to be prepared to answer this question, and in some cases you will need to ask the question on their behalf. By having a veteran employee set aside an hour every other week to help train the newer employees how to handle questions, you can create a win-win situation. The new employees are now more knowledgeable, which can lead to more sales, and the veteran employee will have more time to do their own job without interruptions.

The one-hour session will probably start with several sessions dealing only with problems and complaints. But within a couple of weeks, you can begin to spend time discussing your advertising efforts or sharing ideas that would increase sales.

To make sure that everyone is learning, one of the best procedures is to create a written test for each employee to take home. Ask 10 questions, and give everyone 48 hours to return the test. If they score an 80 per cent or better, offer to give them an extra hour off from work or buy their lunch the next day.

Get people talking
Experience has shown us that employees are now talking amongst themselves, and most frequently the conversation is to exchange ideas about what was taught in our classes. Again, from our experiences, our training program took us into areas we had never thought possible.

Over a period of years, we were able to develop a program of identifying our best employees so that even our customers knew who our leaders were. We developed written job descriptions, a handbook which was written by our staff outlining the proper procedure for performing any task in our store, as well as the policies (store rules) for everyone. Even though we were a small business, we had a degree of formality of how our staff performed in front of customers, in front of management and in front of each other.

Our classes eventually grew in quality, but not in size, to where we split into two groups; an advanced group for our more seasoned pros, and our traditional class for newer employees. You could even make a big deal and ceremony out of an employee graduating from one class to another.

Focus on quality, not quantity
You do not have to have a large staff to conduct an education program. It is not about the quantity, but instead about the quality. Looking at smaller businesses within the industry, many partnerships have gone by the wayside because there was not a clear understanding of who was to do what tasks, and how to perform them. And, a partnership can be as small as two people. Currently, I’m working with a business that is facing tremendous struggles. Part of the challenge is the economy, and part of the challenge is of its own making. It is a husband and wife who cannot decide what to do. And with any two-person situation, the person that wants to vote ‘no’ will always win because they are able to stop anything from happening. Resolve to start a staff education program within your company. It is well worth the time and effort.

Tom Shay is a fourth-generation business owner. He created Profits Plus to share and teach business management from small business experience, not from theory. Shay is based in Florida and offers a free monthly e-newsletter from retailers from his website.