The idea of running your own business is very exciting when looking to the freedoms and growth opportunities. However, too often small business owners miscalculate the actual running costs of a business. To be successful, you’ll need to budget for expenses – both the expected and the unexpected especially when it comes to your employees.
It doesn’t matter whether you have 1 or 100 people on your staff; there are several employee expenses you must take into account. Most would know about the big things, like salaries, benefits, superannuation and payroll taxes. However, there are hidden smaller expenses that tend to add up quickly when forgotten about. Excess leave entitlements are a big one, including paid annual and sick leave.
It is important to keep track of employee leave entitlements to ensure you know how much leave they are owed. It is essential to not only track what they are entitled to, but to also ensure they are taking excess leave at appropriate times. This may involve suggesting staff with large amounts of leave take time off at quieter business times, to ensure these expenses are managed effectively. It will not only guarantee that your staff are happier in their lives, but will ensure they are more productive – as it has been found that people are more productive after a break. It is important to instill a ‘holiday culture’ within your business, which you too follow – this will ensure staff feel like they are able to take their holidays.
Another important expense to consider is employee turnover costs, including hiring and training new employees. This can go hand in hand with the above, as if you don’t invest in a healthy, comfortable and enjoyable working environment you may end up paying for it later with a higher employee turnover. Overall, it is important to look to your business environment to ensure it is one where your staff are happy and productive. Whether it may be that you need to suggest some long-standing staff take some time out and enjoy holidays; it could very well decrease the hidden expenses within your business.