Year-end is a great time. We get to reflect over what we have accomplished and what we have yet to do. We get to celebrate what we did right and we get to write off our failures as part of the past. And we get to redirect our efforts in a new campaign. It’s a cleansing of sort and if done properly will provide energy and direction going into the New Year.
When I look at year end planning, I believe it begins with the overall Vision Statement. This Vision Statement should describe the “grand, overall” destination of where you want to be. I learned from the great Mike Gionta, that a good Vision Statement is a one-page statement that tells a story as if it had already happened. Basically, write a one page statement as if you were 5, 10, 20 years in the future describing what your life has accomplished. Revisit this statement annually and modify it as you deem appropriate.
With the Vision Statement in place there are certain “Big Bucket” plans that will need to be addressed. They all must work together to support the Vision Statement and the execution of these plans will allow your Vision to become reality. The Big Bucket items that I believe fit our industry are:
- Financial/Operational Budget
- Balance Sheet Budget
- Hiring Plan
- Capital Improvement Plan
- Technology and Database Development Plan
- Risk and Contingency Plan
- Retention Plan
Notice that these plans all are co-mingled and dependent upon each other. The Hiring Plan cannot be executed appropriately without a sound balance sheet. The Financial Budget is dependent upon the execution of the Hiring Plan. And the Retention Plan will fail should the balance sheet lead to instability. And it all falls down should the server get so old it cannot produce the call plans necessary to execute our business.
So let’s take a quick look at each of these “Big Buckets.” I’ve included some ideas that you may want to consider as you go through the year-end planning process.
This is simply an estimate of your income and expenses on a monthly basis. These numbers will be created from your history but modified as appropriate because of your decisions in the other planning areas. This is your operating compass to let you know when you’re on track or off course. Without one you are running in the dark — and we all know what happens when we run in the dark, right?
Remember to consider:
- What are the trends in the macro economic environment that could impact my operations in the new year?
- What are the trends in the micro economic environment around my desk specialties that could impact my operations in the new year?
Balance Sheet Budget
Balance sheets are a list of your assets and liabilities, the difference of the two being your net worth or equity. The primary targets we need to measure are liquidity and net worth. Liquidity consists of your cash reserves plus any other assets that could easily be converted into cash such as stocks and bonds.
Ask yourself these questions:
- Are my cash reserves adequate to support the other plans?
- Specifically, are my cash reserves adequate to support my hiring plan?
- Are my debt levels under control compared to my net worth?
- Am I showing a history of increasing my net worth? If not, why not?
- What am I doing to build wealth? What can I do differently?
- Do I have a good banking relationship, an open line of credit?
- If there was an economic disaster tomorrow, do I have the liquidity necessary to live through it?
Our businesses are dependent upon our staff. Production is directly related to the number and quality of employees we have. Our office culture depends on these people who we often spend more time with than our own family members. This is the best time of year to reflect on where you want to take your business. What will be the primary model you wish to achieve? (This should be included in your vision statement.)
- Will I be hiring search consultants, recruit assistants, or researchers?
- How will I attract the best new employees?
- How many employees and what are the best target start dates?
- How many will I need to hire in order to find a successful employee?
- Will I have time for these hires?
- How will I train and onboard?
- Will I hire a search firm to recruit for my office? If so, how will that impact cash reserves?
- Am I ready emotionally to make the investment in new employees and the resulting turnover?
Capital Improvement Plan
From as simple as renewing your current lease to as complicated as searching for, negotiating and moving into a new office building. Now is the time to do a needs assessment, and to consider how this will impact your operations. Changes in this magnitude will effect office production. Consider everything from office furniture needing to be replaced to a new coat of paint.
Remember to ask yourself:
- Is your office aesthetically pleasing to attract new hires?
- How will the timing of any pending relocation or construction impact my operations?
- How old is that phone system, time for an upgrade?
- Is it time to buy my own building?
- Owning versus renting, what will losing flexibility do to my plan?
- Any tax advantages to own versus renting?
Technology, Resources and Database Development Plan
At the heart of making the database easy to develop and maneuver, state of the art hardware and software must be maintained. Again, at least annually you should do a needs assessment. Don’t forget to consider your hiring plan and what impact the number of employees will have on your technology resources.
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How mature is your hiring process? Answer these 5 questions and find out.
- Are there sources of names that my office is missing?
- Should I add a job board or other source?
- Are my resources so strong I can use them to recruit the best employees?
- Are the resources available to my employees sufficient for their continued success?
Risk and Contingency Plan
Remember disasters happen. But disasters are not only caused by weather or fire. You must be proactive in thinking what could happen at any given moment; so that you are not reactive when it does happen.
- What is my plan of action should a search consultant walk out?
- Do you have internal controls in place to address these issues?
- What would happen if you can’t go to the office for a week?
- What would happen if the entire office was destroyed? How would you continue operations?
As stated in the Hiring Plan section, our businesses are dependent upon our employees. Do you have a structured plan that will retain your employees? Ask yourself this, if you worked for yourself would you be happy under the same terms and conditions? Commission plans are obviously the heart of a properly balanced program to incentivize production as well as tenure. Commission plans should be reviewed to match the needs of the office place and the competitive landscape.
Consider these questions:
- What do I do as an office manager to earn my share of the production?
- Is the overall commission plan fair?
- What can I do to make my most tenured feel special?
- Is my benefit package more competitive than my competition?
- Am I happy with the culture of the office?
- Are my employees happy?
- Do I have only the best employees? If not, why not?
- Training plans must be considered, especially for your most tenured. Is my training program the best available?
Remember, if you care, they will care.
Something Else To Consider
Our clients successfully use long-term incentive plans to make it difficult for employees to make job changes. We as recruiters know how well they work when trying to convince someone to leave an un-vested bonus on the table to go to work for one of our clients. Do you have a similar type plan to address retaining the best of the best and long-term employees? Consider balancing incentive trips and long-term incentives at opposite ends of the year, i.e. every six months. Think of it this way, once they earn one, it’s not that long until the next incentive. The possible loss of the next incentive will make them do a stutter step before leaving and sometimes that is all the edge you need.
Your vision is your definition. It is your definition of success. The challenge is to have a set of plans which, when executed, will result in your vision becoming a reality. Good luck and enjoy the journey.