As a small business owner, I know how easy it is to feel overwhelmed with everything on your plate. New items are always appearing on your to-do list, especially right now with year-end tasks like budget and workforce planning, end of year reporting, performance review season and more. It might feel like your only option is to put your head down and power through as best you can to get everything done.
But, with the old year ending and the new year ahead, it might be wiser to hit the pause button and assess the state of your business, especially when it comes to your workforce. With no end in sight for the war for talent, is there anything you could have or wish you had done differently in 2022?
“It’s tempting to focus on forging ahead rather than stopping to assess and adjust for the missteps you made this year,” says Jen L’Estrange, Founder and Managing Director of Red Clover, an outsource HR firm. “Skipping this step would be a big mistake.”
I asked L’Estrange to share her insights on the key items that should be on every small business leader’s end-of-year checklist. Here’s what she shared.
A trap many business owners can fall into is to start working on your plans for next year rather than taking the time and assess what you did well, or not so well, in the year coming to a close. At times, planning ahead can feel easier than looking back.
“We tend to think in future tense,” says L’Estrange, “and closing out processes is less gratifying than planning for the new and different in the year to come. However, the consequences of not addressing open items and issues before year end can be problematic. Sometimes the mental energy we use to avoid that which we don’t enjoy doing costs us more than actually getting it done.”
Put another way, whatever we don’t finish this year inevitably comes back to haunt us in the next. That’s especially true with issues related to managing your cash and, increasingly, people and human resources or HR.
One issue many business owners continue to struggle with, for instance, is payroll. Faced with a talent shortage, many raced to increase pay considering where they wanted to position themselves in the market and what the business could really afford. That’s a lesson learned, along with the potential to put in a more variable pay structure for the coming year. “Variable pay usually achieves the same goals but with much more flexibility to move—up or down—in line with the needs of the business,” says L’Estrange.
With every business fighting for talent, you can’t afford to be anything less than at the top of your game as you head into 2023.
Even as you do the work to assess how the past year went, it’s also critical to be asking yourself important questions to better prepare for the coming year. L’Estrange suggests tackling topics like:
• Do I have a budget and workforce plan that guides my hiring decisions? Do we have updated, accurate job descriptions in place?
• What safeguards do I have in place to protect profit? How do those specifically relate to how I pay my employees?
• How am I continuing to build and grow a workforce where employees feel safe and valued for the work that they do?
Nobody knows what will happen in 2023. But it seems like a good bet that the economic turbulence we’ve seen this year will continue—which means it’s time to get your ship in order when it comes to how you hire, reward and reorganize. “Setting up good business metrics for decision support on all things related to employment is critical to navigating the storm,” says L’Estrange.
Finally, while it’s vital to address any mistakes left over from 2022, it can be equally valuable to stop and celebrate any victories from this past year. 2023 promises to be a wild ride, so strap in, get set—and make it a great one.