0:00

Breaking down everyday workplace

0:00

issues and diagnosing the hidden sickness,

0:05

not just the obvious symptom.

0:05

Our hosts, James and Coby.

0:10

Did we lose a patient?

0:11

No, that's just my lunch.

0:14

Hey, thanks for joining us.

0:14

I'm Coby, he's James. And let's get

0:22

started with a question. How can we find the

0:22

budget to invest in our employee experience?

0:32

Yeah, so this question kind of came

0:32

up or, kind of came as a result of our last

0:40

Q and A episode. So I want to be clear.

0:40

I'm not, m. Our recommendations are not

0:47

going to be looking at, hey, take this

0:47

line item from your budget and move it

0:52

here. Like we. Obviously these are going to be

0:52

somewhat general principles that you can, use

1:00

if you want to open up your books

1:00

to me for some unknown reason. Sure,

1:04

I'll take a look. But really what we want to

1:04

get at is here are some practical strategies

1:11

and ways that you need to shift the way that you

1:11

think about investing in these types of solutions.

1:18

Absolutely. And that's just it, that

1:18

the best we can do in a single podcast episode

1:25

is just help arm you listening with some fresh

1:25

perspectives or maybe some potential business

1:33

case arguments or something that can allow you to

1:33

actually take the. Put a bit of tangibility behind

1:41

how you want to approach either reinvesting,

1:41

or kind of like divesting some of some of your

1:49

current spending into actually in the employee

1:49

experience we talked about in our last episode,

1:54

which are Q and A about things like

1:54

how vital trust is, how vital, employee

2:00

retention is towards your customer attention.

2:00

All these fundamental pieces that are really

2:04

summarized in the employee experience are

2:04

critical towards your business sustainability.

2:10

Because let's be serious, the world is pretty

2:10

complicated and stressful right now. But the

2:16

one thing that is, is, a firm truth is your

2:16

employee experience is one of the most vital

2:24

components towards long term sustainability.

2:24

So if you're not too sure where to invest,

2:30

you will. You're going to get an amazing

2:30

ROI always by investing in your employee

2:34

experience. So we want to give you some again

2:34

ways to rethink how can we get the budget for

2:40

that investment. Hopefully you'll find this

2:40

conversation helpful. so I think we're gonna

2:45

talk about three things. we're gonna bring up one

2:45

of our favorite topics, which is labor value loss,

2:52

helping you kind of like figure out where some of

2:52

the holes of that, you know, that you can patch

2:57

to kind of in order to kind of recoup some of your

2:57

spending. we're going to introduce to you or maybe

3:02

reintroduce you, you've already heard of it. But

3:02

the dead horse theory, something that we find.

3:07

This is a fun one.

3:08

Yeah. And then we're to kinda get

3:08

into kind of some of the nitty gritty and

3:11

we're going to talk about the realities

3:11

of bootstrapping. So let's just jump

3:15

into labor value loss. So this is

3:15

something that we use all the time,

3:20

we love as a concept and I think something that

3:20

just helpful for people to kind of reframe. How

3:26

big of a deal is some of these common issues

3:26

that are just draining your bank account.

3:32

Yeah. So ultimately what we're

3:32

talking about with labor value loss,

3:35

we liken some of these, very common business

3:35

problems. The same to the idea of insulation,

3:46

in your home, when you have cracks in your

3:46

walls, when your windows are not sealed properly,

3:56

when your doors don't close properly,

3:56

when your insulation isn't doing its job,

4:01

money is just leaking out of your business,

4:01

out of your home. When you have these common

4:08

problems like high turnover rates or employees

4:08

who are not performing the way that they need to,

4:20

or you know, a bad employer brand or all of

4:20

these common problems, they often don't show

4:28

up as line items on your balance sheets, but

4:28

you're bleeding money by not addressing them.

4:37

Yeah. And it's just like

4:37

the idea of like insulating your

4:43

home. We refer to addressing labor value

4:43

loss as insulating your productivity.

4:47

Yeah.

4:47

Because again, so we're going to reh

4:47

share with you some stats that we talked about

4:53

in a previous episode. We’re just going to

4:53

bring them up again. But we did an episode

4:57

on what's the cost of doing nothing on your

4:57

workplace culture from season two. So this

5:01

is of interesting checkout that episode too.

5:01

Cause we go into in more depth. But the ones

5:05

we kind of wanted to reframe again are things

5:05

like employee eternal. So, employee turnover.

5:12

The typical cost of employee turnover is 20% of

5:12

an employee's salary. So that's 20% of employee

5:19

that leaves their salary is lost as an additional

5:19

expense in things like productivity slowdowns

5:25

and in kind of replacement costs and all the

5:25

other kinds of like dip in morale that affects,

5:33

you know, performance and impacts absenteeism

5:33

and everything else like that too. So it's the

5:37

idea of whenever employee leaves, there's a major

5:37

cost associated with it that compounds other areas

5:44

and makes other things more expensive. And the

5:44

idea of this productivity insulation is that

5:50

if this is something that's happening that you're

5:50

not addressing is kind of like worried about Your

5:56

heating bills while you're leaving the windows

5:56

open. Midwinter. Right. It's just that this is

6:01

a major area of financial liability that most

6:01

people don't really think about. Again, 20% of an

6:09

employee's salary may not seem like a lot to you

6:09

listening, but think about every employee that's.

6:14

Left over each employee salary.

6:14

Yeah. And if you're in an industry that

6:20

has historically high turnover rates

6:20

like retail, you're talking 60, 70%

6:29

turnover rates. 20% for each one is a massive

6:29

loss. And it's not just retail that suffers

6:38

from high turnover rates. So many so many

6:38

businesses are focused on what they can do

6:45

to attract people that they neglect.

6:45

What can we do to hang on to people,

6:51

to treat them well so that they want to

6:51

stay and where they don't want to leave.

6:56

Absolutely. So again, I think turnover

6:56

is one that everyone kind of gets. Okay. Yeah,

7:01

you, there's slowdowns, there's overtime costs,

7:04

all these little things that kind of make costs

7:04

go up. Another one that I know you really like,

7:10

that is a really interesting one is

7:10

the cost of workplace incivility.

7:14

Yeah.

7:15

So on civil workplaces, things where

7:15

like microaggressions are super common or rude

7:21

and passive aggressive behavior are kind of the

7:21

norm. This kind of environment can reduce employee

7:28

performance to about 26% of every employee

7:28

that experiences it of their annual salary.

7:36

Yeah.

7:36

So what we mean is if you're in

7:36

a workplace where you would classify your

7:41

20 person team, let's say that you work with on a

7:41

regular basis, that there's a sense of incivility,

7:47

microaggressions, rude behavior, snide comments,

7:47

people don't feel. Yeah. Then every employee is

7:55

losing the equivalent of 26% of their annual

7:55

salary is being lost in performance because

8:01

of just the nature of this environment, the

8:01

stress, the lack of psychological safety,

8:07

the worrying and having to check and

8:07

recheck and the poor cooperation efforts,

8:13

all this stuff. 26% of each employee's

8:13

salary is lost because of this incivility.

8:18

And if you've ever worked in a hostel or

8:18

in, in uncivil in civil workplace, this would make

8:29

a lot of sense to you because the amount of energy

8:29

that it takes to put up with that garbage day in

8:40

and day out, it's energy that's diverted from what

8:40

people should be doing, which is their jobs. it

8:47

creates clicks which creates further incivility.

8:47

It creates ah, it erodes trust which creates

8:54

further problems. It just, it is a poison pill

8:54

that doesn't get talked about. so you're right.

9:03

I love this stat. It's not that I love workplace

9:03

incivility, although if you've worked with me,

9:08

maybe you have a different opinion on that. I.

9:08

On the fence, yeah. But it is a really. What?

9:19

It's something that I've experienced and seen

9:19

firsthand. and something that doesn't get the

9:27

attention that it should because it is a very

9:27

destructive, unfortunately, common, problem.

9:37

Yeah, absolutely. So the next one I

9:37

want to bring up, just be kind of clear for

9:42

you listening. If you're wondering where these

9:42

stats are coming from, I'm going to cite all

9:47

these stats in our show notes. So if you're

9:47

wondering if we didn't just make them up,

9:50

this is where they come from. Anyway, the next

9:50

one is poor workplace communication. So this is

9:57

around when poor communication is a persistent

9:57

problems. It burdens businesses and employees to

10:03

the point that every employee that is affected

10:03

by poor workplace communication can lose about

10:12

21% of their annual salary in inefficiencies, in

10:12

mistakes, in performance breakdowns, in delays.

10:21

And that is considerable when you think about like

10:21

incivility for example, going back to the last

10:27

one. Can live in a small team, but not in a whole

10:27

organization. But poor workplace communication is

10:34

usually systemic. it's usually everywhere.

10:34

So if you have 10 employees, then that's 21%

10:41

of the average employee salary being lost of

10:41

10. If you have 1,000 employees, then that's

10:45

the 21% of every employee's that annual salary

10:45

being lost. That is unfathomable amount of loss.

10:52

It's a scalable problem,

10:52

Right. We're always looking for

10:56

scalability in our businesses. Here's one for

10:59

you, here's a really great example. Compound.

10:59

Let's just scale our communication problems.

11:06

Well actually speaking of compound,

11:09

annually, every year that this

11:09

problem goes is the loss of it, right?

11:15

That's just it. I mean turnover stat

11:15

is one that is pretty common. People have heard

11:21

the 20% and whether it connects with them or

11:21

not, you've heard it a lot. It's a one time

11:29

expense. When somebody leaves, it requires

11:29

that amount of money to bring somebody new in,

11:36

get them up to speed and productivity

11:36

and blah, blah, blah, blah, blah,

11:39

all those other things. If you let incivility

11:39

go without being addressed year over year over

11:46

year that you're. It's not a one time cost. Same

11:46

with the communication. It's not a one time cost.

11:54

Right.

11:54

So if this problem

11:54

has persisted for five years.

11:59

Yep, there you go. Compounded annually.

12:02

Yeah, scalability and compound Interest.

12:05

There you go.

12:06

All the things in exactly the wrong way.

12:10

So let's talk about the last one that I

12:10

want to share, which is a bad employer brand. And

12:15

this is one that I think most people hopefully

12:15

are thinking this isn't our problem. But you may

12:20

want to verify this is not your problem. But this

12:20

is that ah, when you have a bad employer brand,

12:27

your reputation in the labor market is not overly

12:27

great. What businesses typically have to do is

12:33

they have to kind of create up their wages a

12:33

little bit to make up for that poor reputation,

12:38

to make the risk of working for this business

12:38

that they hear bad things about to make it

12:43

worth it. And that usually looks like 10%,

12:43

higher salary requirements in order to,

12:53

order to convince a candidate that to take a

12:53

job with the company with his bad reputation.

12:59

Yeah. So if a candidate is evaluating two

12:59

different job offers and one has kind of a m. Meh.

13:06

Neutral, not really spectacular reputation

13:06

and the other one has a poor reputation,

13:14

it's going to cost that second company 10%

13:14

more in wages in order to attract that person.

13:20

Right? Yeah.

13:21

So again this is not

13:21

a single instance. It's not

13:23

10% once. That's 10% more wages

13:23

week out while they're with you.

13:31

Exactly it. And again, and what I find

13:31

funny about this step is one of the most common

13:39

like partners, like connected, issues with a

13:39

bad employer brand is high employee turnover.

13:47

Yah.

13:47

Right. Which means your churn

13:47

is so much higher, which means you're

13:51

hiring so many more, which means that

13:51

you're putting 10% into the workplace.

13:56

Incivility leads to turnover, leads

13:56

to employ poor communication. Like all of these

14:02

things are connected. And that's why labor

14:02

value loss. I mean getting back to the actual

14:08

question of, you know, how can we find the

14:08

budget to invest in our employee experience?

14:15

You're spending money already. You are losing

14:15

money on by. If you have these issues in place,

14:22

if you have workplace incivility, if you have

14:22

high turnover, if you have a bad employer brand,

14:29

if you have inefficient, poor

14:29

internal communication structures,

14:35

you are already losing a lot of money by not

14:35

addressing these issues. What you need to do

14:42

is understand the cost of doing nothing is

14:42

higher than the cost of doing something.

14:50

Right. Absolutely. And that is just

14:50

it is that by choosing to not fix these issues

14:59

is an active choice. It's like choosing

14:59

to leave all your windows open midwinter

15:05

and concerned about the cost of heating. That

15:05

money is getting spent. It is. You are losing,

15:11

you're losing it today. You lost it yesterday,

15:11

you lost it the day before. It's not like your,

15:17

if you don't do anything and you cover your ears

15:17

and close your eyes, the problem pauses. It's.

15:22

That's always how problems get fixed.

15:25

Bury your head in the sand.

15:25

That's an effective strategy.

15:28

And it's stupid that I got to say it out

15:28

loud, but people have to hear it. And this is,

15:33

and this is the reality. So if you're listening

15:33

to this podcast to find out how can you make

15:38

a business case or present an idea for why

15:38

your company needs to invest in your employee

15:44

experience, labor value loss, and the fact that

15:44

they are already bleeding money in a lot of these

15:51

areas. Because again, a lot of these problems

15:51

don't exist in isolation. They usually kind of

15:54

exist kind of together. You show how big of

15:54

a expense they're already spending, that if

16:02

they were to go a little bit proactive and they

16:02

were to invest even a fraction of what they're

16:07

probably losing, to shir up some of these holes

16:07

before they kind of, you know, in the bucket,

16:13

before they add more water, then it's something

16:13

that they will, you'll see that's where that

16:19

budget can come from because it's about mitigating

16:19

risk rather than just spending on nice to have.

16:25

And I think that is going to be the positioning

16:25

that you might want to bring if labor value loss.

16:30

You think that's going to be your key to finding

16:30

the budget to invest in employee experience?

16:36

Yeah. so I'm, I want to move on to the

16:36

next kind of point and this I'm gonna have to,

16:49

I'm going to read, the actual definition. So

16:49

what we're talking about is called the dead

16:55

horse theory. it is a satirical metaphor

16:55

that illustrates how some individuals,

17:02

institutions or nations handle, obvious unsolvable

17:02

problems. Instead of accepting reality, they

17:10

cling to justifying their actions. Thats a key

17:10

element right there. The core idea is simple. If

17:16

you realize you’re riding a dead horse, the most

17:16

sensible thing to do is to dismount and move on.

17:24

However, in practice, the opposite often happens.

17:24

Instead of abandoning the dead horse, people take

17:30

such actions as buying a new saddle for the horse,

17:30

improving the horses diet despite it being dead,

17:38

changing the rider instead of addressing the

17:38

real problem, firing the horse's caretaker

17:44

and hiring someone new, hoping for a different

17:44

outcome. How many times have we seen that happen?

17:51

Holding meetings to discuss ways to increase

17:51

the dead horse's speed. Creating committees

17:57

or task forces to analyze the dead horse problem

17:57

from every angle. These groups work for months,

18:03

compile reports and ultimately conclude

18:03

the obvious. The horse is dead. Hello,

18:08

government. justifying efforts by comparing

18:08

the horse to other similarly dead horses,

18:15

concluding that the issue was a lack of training,

18:15

proposing training programs for the horse, which

18:21

means increasing the budget or redefining the

18:21

concept of dead to convince themselves that the

18:27

horse still has potential. The lesson this theory

18:27

highlights how many people and organizations

18:34

prefer to deny reality, wasting time, resources

18:34

and efforts on ineffective solutions instead

18:39

of acknowledging the problem from the start

18:39

and making smarter, more effective decisions.

18:45

Yeah, so that was from a

18:45

social media post that we found

18:48

when we were doing some research for

18:48

this. So, we can't take credit for.

18:52

The dead horse theory, but I love it.

18:56

Yes. And that description from that

18:56

post was a very, very good description. but

19:01

it is something that I think should be a tool

19:01

in the toolbox or the person listening to try

19:11

to make again the business case and help

19:11

identify where can we find the budget to

19:15

invest in these things. The dead horse

19:15

theory is something that there’s a Latin

19:23

phrase called reducto ad absurdum

19:23

where you take an argument and you

19:26

reduce it to its most, most like ridiculous

19:26

scenario in order to kind of like, you know.

19:32

the ineffectiveness of it.

19:34

Yeah. and that's what the

19:34

dead horse theory is. But it is so

19:39

apt and so relatable. The thing that

19:39

I always, I always. The two points

19:48

of that post that really resonated

19:48

with me was replacing the jockey.

19:53

Yep.

19:54

I mean how many times have we seen

19:54

this department's failing this, this, you know,

20:01

or you know, or we're not penetrating this

20:01

market or you know, or this division needs,

20:06

you know, it, it's got to be a problem with the

20:06

person not realizing that there's a systemic rot

20:12

in the organization or there's this major issue

20:12

or whatever it is, so they just don't, you know,

20:18

so that they just kind of swap out the jockey.

20:18

Yeah, exactly. That's just it. They scapegoat

20:24

people. the other one too is the justifying the

20:24

dead horse by comparing it to other dead horses.

20:33

Yeah, that's what we often refer to as the amazing

20:33

race to the bottom. Right. The idea of, well,

20:39

we're not that bad. Our problem. This is just the

20:39

nature of the industry. So, so we're in line with

20:47

our competitors. We can't be that bad because I

20:47

mean the idea of going back to one of our favorite

20:52

talking points of our seven by three rule is that

20:52

factors of the workplace have to be competitive,

20:57

sufficient and equitable. But many businesses only

20:57

hold themselves to the standard of competitive.

21:03

So. Well, if we're in a similar boat as

21:03

our competitors, then we really can't be

21:08

that bad. But that is just justifying that the

21:08

dead horse. The horse is just find dead horse by

21:16

comparing it to other dead horses. Right. Because

21:16

I mean, the idea of, well, if everyone sucks,

21:22

then it's okay for us to suck. Because sucking is

21:22

just normal. Is just justifying the dead horse.

21:28

Yeah, it's and. It is a. When.

21:28

When it's actually articulated. because

21:33

the problem is nobody thinks about

21:33

the justification of competitive in

21:39

that manner. Right. We think about

21:39

competitiveness in terms of, well,

21:44

competitiveness is a good thing. We want

21:44

to be competitive with other people.

21:48

Right.

21:48

But the problem is, who are

21:48

you measuring yourself against? If you

21:53

are measuring yourself against the worst actors?

21:56

Right.

21:57

you can. I mean, I'm

21:57

competitive with the worst actor,

22:02

in the world. Doesn't mean that I'm a good

22:02

actor. But that's how we structure things,

22:12

in our businesses. That's how we approach the. We

22:12

don't look at, Are our wages actually sufficient

22:19

and equitable? Are they competitive with other

22:19

people? Well, yeah, everybody in the industry

22:23

pays garbage. So we're going to pay garbage

22:23

too, Right? Or whatever that mentality may be.

22:28

Yeah. Well, do you want. This reminds

22:28

me of. Well, we had this conversation recently

22:31

with one of our partners. we're talking with

22:31

Becky from Keto Creative. He was talking about,

22:38

employee retention rates in retail. Right. And

22:38

she was saying that, the overall turnover rate,

22:46

sorry, the standard turnover rate for most retail

22:46

is like 60 to 70%. And a lot of the business that

22:52

she works with, when she talks to them, they're

22:52

like, well, that's just what it is, you know,

22:56

so we just hire or. So we invest a lot of our

22:56

dollars into our recruiting processes and our

23:01

onboard. And we've got a team of recruiters

23:01

we're really good at recruiting because we.

23:05

Need to replace 60 to

23:05

70% of our staff every year.

23:09

Yeah. So that's just the nature of the

23:09

business. But then she was saying that. But then

23:13

she counters that was saying. Do you realize, I

23:13

realize that Costco's retention rate for employees

23:20

who stay for at least a year is 93%. And that

23:20

at Costco's overall turnover rate is 8%. Yeah,

23:30

8% compared to 60%. But this is the

23:30

reality is that a lot of the retail,

23:35

the major retailers, like across

23:35

North America are saying, well,

23:39

the standard retail, turnover rate is 60% to

23:39

70%. We're within that. So we're competitive.

23:45

But They' just a statistical anomaly.

23:50

But yeah, but that, just that they're

23:50

comparing themselves to the standard that everyone

23:58

has agreed is acceptable or is normal instead.

23:58

Instead of comparing themselves to the ones that

24:04

are actually doing it. Well. So it's like,

24:04

like you said, they're comparing themselves,

24:10

they're comparing their dead horse

24:10

to the other dead horses saying well,

24:13

we're just as fast as they are not

24:13

comparing themselves to a live horse

24:17

who's doing well. And that is the kind of

24:17

a normal justification that exists across

24:25

the business kind of continuum. is this idea of

24:25

comparing our dead horse to other dead horses.

24:30

Oh yeah. And not. This is

24:30

not a retail specific problem. No,

24:36

this is a. If you're in business, it's probably

24:36

a problem that you're experiencing. it is just

24:43

pervasive because it's how we teach businesses

24:43

to think of business owners to think about their

24:50

business from a m. Strictly competitive landscape.

24:50

So as long as we're in line with everybody else,

24:56

we must be doing fine because everybody

24:56

else must be doing fine. But everybody

25:00

else is experiencing the same problems, right?

25:00

Absolutely. The one really amazing thing about

25:09

the race to the bottom. Is that it doesn't take

25:09

much effort to stand up above your competition

25:15

when everybody else is seeking to do the bare

25:15

minimum. It does not take an awful lot for you

25:23

to stand up and do a little bit more and

25:23

set yourself apart from the competition.

25:30

Well, I mean it doesn't

25:30

take much to dismount from your

25:34

dead horse and get onto a little Shetland pony.

25:39

If you get off the horse and

25:39

start walking, you're going to be better.

25:42

Exactly. And that is kind of the reality

25:42

of it. Right. But I mean, but I want to tie the

25:49

dead horse theory back to kind of the question

25:49

how do I find the budget to investor employee

25:53

experience. Well, the reason why we're talking

25:53

about this, even though it's entertaining,

25:58

is because what the dead horse theory kind

25:58

exemplifies is the clarity to stop putting

26:07

good money after bad. And that's how you find the

26:07

budget. Realize that to stop hosting meetings to

26:16

try and talk about how do you improve the

26:16

horse's nutrition, stop trying to replace

26:20

the jockeys. Right. Just realize that there is

26:20

sometimes the sunk cost of something makes you

26:29

want to put more money after bad. But I mean

26:29

if you step away, if you dismount and say,

26:36

you know what, we're going to realize that, that

26:36

we're going to write that loss off and we're going

26:41

to try and put good money after around effective

26:41

solutions. That's going to be where it is. And

26:47

one of the most common dead horses that we see

26:47

in the employee experience realm is performative

26:54

solutions.Right. This looks good on paper, but it

26:54

has no measurable or clear benefit. But it looks

27:03

good. So we're going to keep investing in it. Is

27:03

one of the dead horses that almost most of you

27:09

listening to this are experiencing existing

27:09

in your workplace right now. And it's like,

27:14

well, we've already invested in this so we're

27:14

going to keep investing in it. We're going to

27:18

keep it going. They're trying to ride that dead

27:18

horse and they're putting good money after bad.

27:23

Yeah, I think the key that I want to

27:23

pick up on and what you just said is around

27:29

sunk cost fallacy. because this, it really is

27:29

the central to this whole idea that you know,

27:37

we get to a point where we have invested a certain

27:37

amount of time, energy or resources into something

27:43

and it is hard to let go. I mean it happens in

27:43

everything. It happens when I'm watching a movie,

27:49

I'll sit and watch. I'm half, half an hour into a

27:49

movie. It's like, this is a terrible movie. Well,

27:54

I've already spent a half an hour, I might

27:54

as well finish it. No, turn the stupid movie

27:58

off. Right. But it's the same with our

27:58

businesses, right? Like we get into this,

28:03

this self perpetuating situation, where I've

28:03

invested so much time into this, I can't,

28:12

if I just drop it, that money has been wasted.

28:12

So I need to put more money in to be wasted.

28:18

Well, here's the thing, going back to your

28:18

movie thing, I actually think that it's more like

28:25

you, you go to the theater and you sit down and

28:25

you watch a movie that you paid to watch and the

28:30

movie is awful. So your thought is well, maybe if

28:30

I go buy more popcorn, I'll enjoy the movie more.

28:38

Right.

28:39

That's kind of really more of, it's

28:39

like, right. I mean the idea of like, you know,

28:44

like, like you know, put, we're putting

28:44

good money after bad. So I mean again,

28:49

going back to the kind of, the central

28:49

question here is that this is something

28:53

that there is money that is being wasted

28:53

that could be reinvested or diverted

28:58

into your employee experience by stopping

28:58

your habit, of investing in the dead horse.

29:08

Stop doing what's not working for you.

29:10

Right. Stop putting good money

29:10

after bad. And that is where probably a

29:15

very kind of like. I don't Imagine if you

29:15

have budgets that are allocated that money

29:23

can be redirected today. Most likely

29:23

with labor value loss. It's going to

29:28

require a bit more a longer term view where

29:28

I think with the dead horse theory there's

29:33

stuff that you could probably find money to

29:33

reinvest now looking for that dead horse.

29:38

Because I guarantee you in

29:38

your business it's there somewhere.

29:41

Yeah. And if you're wondering,

29:41

okay, so if we find a little bit,

29:45

what do we do with it? Well then that's a

29:45

different conversation. Once you actually

29:48

find the money, where do you put it? We

29:48

would always say put it into diagnostics,

29:52

put it into figuring out where your problems

29:52

are. What led you to the situation where you

29:56

had to invest in this dead horse. That's where

29:56

I'd suggest as long. But again realizing that if

30:02

you can divest from a dead horse, you know, into

30:02

something that's actually going to benefit you,

30:06

that's going to be where you find some budget.

30:06

so let's move on to the last one. So the last

30:12

one again is a little bit more obvious, and

30:12

a little bit less fun. And that's the idea.

30:18

Not as fun as

30:18

riding a dead horse I guess.

30:21

So suppose bootstrapping to kind of, to

30:21

receive financial and a mental ROI is kind of

30:29

what we want to talk about. So again. So again the

30:29

term bootstrapping may be familiar to most people,

30:34

but just clarify. Bootstrapping is the idea

30:34

of like kind of like tightening up your boots

30:39

and kind of like, and like bracing yourself

30:39

it yourself. Yeah, embracing yourself for

30:45

tougher times. and willing to take kind of a

30:45

small term loss for a longer term gain. This

30:53

is the idea of you know like you know it may,

30:53

it sometimes it may be cuts, sometimes it may

31:00

be pay reductions of the people in charge, maybe

31:00

holding back dividends. It may be borrowing money,

31:06

it may be looking for alternative financial

31:06

options. It's the idea of like going leaner in

31:12

your spending so you can free up more money to put

31:12

into the things that are actually going to benefit

31:18

you in the long term. Short term loss for long

31:18

term gain is really kind of what a lot of this

31:24

concept is. And it is not fun. No one likes it.

31:24

It's something that is the, that's how you have

31:31

tough years. But I mean it's the idea of you need

31:31

to take a bit of a loss, hold a bit of money back,

31:42

reduce personal benefits or whatever it is in

31:42

order to kind of ensure that you're investing

31:47

in the Sustainability of your business so

31:47

that you've got longer term benefit. Right?

31:53

Yeah. the challenge

31:53

with this is often that

31:58

like in the context of what we're talking about,

31:58

you know, going back to the original question of,

32:04

you know, investing in our employee experience,

32:04

it can be, it's seen as an intangible. Right. The

32:15

employee experience is not, it's not a physical

32:15

product, it's not a piece of equipment. It's.

32:21

So it can be challenging for us to kind of

32:21

work up the nerve or the, the will to invest

32:30

in some of these things because at least if

32:30

I went out and bought a piece of equipment,

32:35

I have something tangible that I can show this

32:35

thing has a certain amount of value because I

32:40

paid a certain amount of money for it. It also

32:40

means that it's easier for me to get a loan to go

32:47

out and buy a piece of equipment that I need for

32:47

my business because it's a tangible asset that if

32:52

I don't pay my loan back, the, the bank will take

32:52

from me and they can recover some of their cost.

32:58

There's a lot of I mean it would not be,

32:58

it would be wrong of us not to acknowledge

33:05

the fact that it can be very difficult to

33:05

secure, financing for operational expenses.

33:14

Right.

33:15

And that, you know, financing for

33:15

equipment is a much easier proposition because of

33:21

the way that banks like to loan money and they can

33:21

just take it from you if you don't pay it back.

33:26

That's a fair point.

33:26

Yeah, that's a good point.

33:29

Yeah.

33:29

But I mean, but the thing too is that. So,

33:29

but the way. But what you said also kind of does

33:36

also allow for us to kind of make a bit of a path

33:36

forward because capital expenses, I think you're

33:41

hundred percent right. But a lot of times what

33:41

happens is when you have equipment that breaks,

33:47

it's not necessarily about replacing the equipment

33:47

that most businesses do. Most of the businesses

33:52

kind of, look at the maintenance costs, looks at

33:52

repair costs. Those are more operational expenses

33:59

in a large. A lot of it is a service rendered.

33:59

Right. Bring in someone pieces to replace. And

34:08

that's something that businesses, businesses have

34:08

an easier time getting capital investment. You're

34:12

right. Or capital expenses covered. But a lot of

34:12

them still buy the money for repairs, maintenance,

34:19

that sort of thing. That is kind of the same

34:19

approach that we're talking about. Right. When it

34:24

talks about your employee experience, usually it

34:24

might require help and service from someone else,

34:29

from an expert, or whatever it might be. And then

34:29

it's a matter of how would you find the money for

34:35

those Repairs and maintenance is likely the same

34:35

ways that you could find money to invest in your

34:41

employee experience. It's probably the same

34:41

method. It might be borrowing from alternative

34:45

financing options that are not necessary

34:45

to capital. It might be again like go and

34:51

lean and trying to find the money internally

34:51

and divesting from stuff or whatever it is.

34:58

But the other thing too is that keeping in mind

34:58

the bootstrapping idea is about receiving a good

35:07

ROI. Not just a financial ROI, but almost like

35:07

an ROI for your mental health. Because if you're

35:13

seeing your business decaying because of these

35:13

employee experience issues and you're like I don't

35:20

know how to find the budget for it, I'm stressing

35:20

out because of it. You're also investing in your

35:25

mental health as well. As long as your long term

35:25

sustainability financially it's a good investment

35:31

if you have the right partners. You have a

35:31

tactical evidence based approach to do it.

35:37

But I mean it requires you make sure that you can

35:37

trust the process and so you're willing to stick

35:42

it out. Right. But it's the idea of how would

35:42

you pay for repairing vital piece of equipment

35:49

is largely the same way that you would, you know,

35:49

pay to kind of repair an employee experience.

35:57

Yeah, I like that, I like that analogy

35:57

more than just the direct capital cost because I

36:04

think you're right in that like there's obviously

36:04

that distinction between capital expenses and

36:10

operational expenses. But the maintenance expense

36:10

on equipment is like we will find that if you're,

36:20

I don't know if you're in a if you're a

36:20

manufacturer, if you produce a product and a piece

36:27

of equipment that you have, you don't need to buy

36:27

a new one but it starts to not work as effectively

36:32

as efficiently, you can see the problems coming.

36:32

You're going to find the money somewhere to fix

36:38

that issue because it, fixing that issue means

36:38

that your product continues to get out the door.

36:47

It is the same mentality with some of these

36:47

employee experience initiatives that if we, if

36:54

you can fix these issues it means more products is

36:54

out the door, it means higher revenue based on the

37:04

like. There's so many benefits that can come from

37:04

just shifting your perspective in how we look at

37:14

employees experience, employee relations and kind

37:14

of any problems associated with our employees,

37:21

they are in a to be completely reductionist,

37:21

they are just another tool that we use to deliver

37:28

value to our clients. It's a terrible way to talk

37:28

about a human being. But if we want to create the

37:36

analogy between kind of employee experience

37:36

and, ah, you know, machinery, it's there.

37:44

Are similarities in how we can structure that

37:44

argument. Obviously, human beings deserve more

37:53

attention, better value than better treatment

37:53

than the way that you treat your machines.

37:59

Thank you for saying that.

37:59

That will cut it on the hate mail.

38:01

Yeah, like, obviously.

38:04

Yeah. but you're right. If you need

38:04

to be kind of like if you need to reduce

38:10

everything down to an equal parallel

38:10

so people kind of see the connection,

38:16

that's not a terrible way to at least address that

38:16

from a financial budget line item piece. Right.

38:28

I think that I'm hoping that we gave you listening

38:28

some value in this question. I really want someone

38:35

that listened to this episode to go, okay, I'm

38:35

curious about this question and that we didn't

38:42

give you fluff, that we gave you something that

38:42

might actually allow you to take some actionable

38:48

steps forward. again, it's hard for us in a

38:48

single podcast episode to kind of solve your

38:55

exact item. Say, say, hey you, Kelly, go to

38:55

your line item and move this one over. There

39:02

you go. Problem solved. We can't do that. But

39:02

I mean, hopefully we gave enough ammunition,

39:08

enough justification, enough business case,

39:08

enough strategy kind of, conceptually to allow

39:14

you to kind of rethink how could you tackle this

39:14

problem specific to your workplace. And hopefully

39:20

you have a path forward. because that really

39:20

has been, is our intention with this episode.

39:25

Yeah, you know, I've been hesitant to.

39:25

I think I'm just going toa mention it. if you

39:32

are in a situation where you're looking for,

39:32

a solution, you're looking for operational,

39:40

funding to get some of these problems addressed,

39:40

it can be really hard to go to, to get that from

39:45

a traditional bank or a traditional lender. we do

39:45

have, a partner, a good friend of ours who is in

39:52

the financial services sector. his company has

39:52

a whole bunch of partnerships with alternative

39:59

lenders. I'm not going to name drop or do any

39:59

of the promotion stuff here because it's not

40:06

appropriate. But if you are struggling, if you

40:06

want to find an alternative, feel free to send us

40:13

an email just to shoot us a message, info Roman3CA

40:13

and I'd be happy to pass along the, information

40:20

to you. Hopefully it helps. If it helps,

40:20

wonderful. Otherwise, just ignore what I said.

40:27

Okay. All right, so I'm gonna do a little bit of a

40:27

summary. So, the question was, how do we find the

40:34

budget to invest in our employee experience? Well,

40:34

the three things we talked about hopefully will be

40:40

helpful to you as you kind of carve about a path

40:40

forward to Address that in your own workplace. The

40:44

first thing we talked about was labor value loss.

40:44

The idea of there is a cost associated with not

40:53

resolving common workplace issues like employee

40:53

turnover, like in civil workplaces, like poor

40:59

communication, like a bad employer brand. And

40:59

all of these problems have a significant cost

41:05

to them. And that cost is often an annual

41:05

cost and that cost is usually per employee,

41:11

that's experiencing it. Racking up to significant

41:11

losses in your organization that you are spending

41:17

today by not addressing them. And the only way to

41:17

stop the hemorrhaging of this kind of money going

41:25

out the window is to actually to tactically

41:25

address these issues with evidence based

41:31

approaches. And you'll start to see cost recovery

41:31

from these problems no longer being as large or

41:37

ideally resolved completely. The next thing we

41:37

talked about is the dead horse theory. Kind of a

41:44

satirical statement of the fact that businesses

41:44

often know are on a horse that in a race that

41:52

dies. And the idea that they instead of getting

41:52

off the horse and moving on, they're trying

41:58

to reinvest in the horse, trying to justify the

41:58

horse being dead. Anything to kind of stick with

42:03

the sunk cost of this horse already. But what that

42:03

really does is that just puts good money after bad

42:09

and that is money that could be red divested

42:09

into resolving these issues by accepting the

42:16

reality and not being in denial about the horse

42:16

being dead and being able to put these often

42:24

the critical capital into will actually help you

42:24

not just to just kind of keep the facade going.

42:31

Yeah.

42:32

And the last thing we talked about was

42:32

bootstrapping and kind of like tightening your

42:36

belt in order to receive a financial and mental

42:36

ROI. The idea that you know, the same way that

42:43

you would find the money to fix vital pieces of

42:43

equipment that help you generate revenue is a

42:48

similar way that you can actually find the budget

42:48

to invest in your employee experience. It may be

42:53

about borrowing from alternative lenders, may be

42:53

about reduction of cost and salary or whatever it

42:58

might be, delaying dividends, whatever it might

42:58

be. But it's going to be about tough times in the

43:05

short term to stabilize your long term success.

43:05

And it's something that we often will do it for

43:11

more tangible things like maintenance costs or

43:11

whatever like. Or whatever. But that same strategy

43:18

is probably what we could, we could look at for

43:18

how we can invest into our employee experience.

43:23

So that way we're not put as risk, same kind of

43:23

risk with that as we are if our equipment stops

43:29

running. Alright. So that about does it for us.

43:29

We for a full archive of the podcast and access

43:36

the video version hosted on our YouTube channel,

43:36

visit Roman3.ca/podcast. Thanks for joining us.

43:43

For more information on

43:43

topics like these, don't forget to Visit

43:46

us at Roman3.ca. Side effects of this

43:46

podcast may include improved retention,

43:52

high productivity, increased market share,

43:52

employees breaking out in spontaneous dance, dry

43:57

mouth aversion of the sound of James'

43:57

voice, desire to find a better podcast…