Without the right tools or equipment to get the job done, it takes longer. Often, things have to be done over. It’s the same with people. Trying to do the job with lower-paid, but unqualified, employees will cost your organization more in the long run.
Small businesses and non-profits often think that their budgets aren’t big enough to invest in the people they really need. Especially finance and administrative staff, who provide information and support for the entire organization. What does it cost not to invest in knowledgeable and experienced people for finance and administrative roles?
Organizations are exposed to five risks by not investing in the right people:
Limited Capacity and Lack of Innovation
People without the necessary skills and experience may not even be aware of what to do, let alone good practices. Organizations planning to grow, or to stay compete, need people who can keep up with changing conditions and new methods.
Unqualified employees often results in high turnover. Hiring and training takes time. Vacancies on your team put stress on your other employees. Time and stress are not expense items on your financial statement. But they are real costs you cannot recover.
Time Spent Correcting Errors
Unqualified employees are more prone to errors. Errors are time-consuming and expensive to correct, assuming they are detected. The cost of undetected errors is incalculable.
Experienced people know what to do and how to it. They’ve seen it before. They assess new situations quickly and accurately. Inexperienced people take more time because they are figuring it out as they go.
Regulatory or Legal Compliance Issues
Employees must be aware of compliance issues that can hurt the organization. It could be issues particular to your industry or general business considerations, such as taxes and payroll. Getting any of that wrong can be very costly.
Getting the right people on the team isn’t easy. It’s pretty much impossible if the pay isn’t enough to attract and retain them. Considering the five risks of failing to invest in the right people will head-off the expensive issues that arise from making the cheapest decision.