3 Reasons Why Salaries Are Increasing But Sales Are Not

As a business owner, one of the hardest things you’ll have to determine is how much to pay your employees. You want to attract quality workers, but you also need to balance that with your company’s revenue and the quality of work that your employees are putting out.

Cash is finite within your company, and your profit can tend to come in cycles. When you overspend in one area, like employee salaries, you’ll see an effect elsewhere. Overpaying even just one employee without seeing adequate results can compound over time. Bloated wages could potentially affect your ability to invest in innovation for your company that could improve your profits.

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If your employees’ performances are failing to meet your expectations despite being paid well, and your company’s sales are suffering. As a result, you may be experiencing one of these three pitfalls.

1. You’re not being honest with what skills your team lacks

One of the most important steps you can take is sitting down and making an honest and frank assessment of your team. You may need to set aside the egos of yourself and your employees and ask: What skills do we lack?

Your team’s job responsibilities should be clear to them, and the skills necessary to be successful in that position should be, as well. Once those responsibilities and skills have been made clear, encourage employees to do an honest evaluation of themselves and see where they may have skill shortfalls, or perhaps skills that are being underutilized. Employees should be given the opportunity to develop through coaching, mentoring, and training. However, if expectations still aren’t being met, then it may be time to revise their responsibilities.

Once you have a better understanding of where your team is lacking in skills and experience, you’ll be able to identify the roles you must fill to make up for those shortcomings. There are some obvious positions like accountants and bankers that your business probably doesn’t have the staff to fill.

However, there are other positions that you thought you could fill on your own or delegate to an employee that just isn’t working out. Things like email and social media marketing, content creation, and SEO strategy are all areas that can help your company’s sales increase by being outsourced to an experienced third-party company.

While you may feel like it’s more cost-effective to pay your employees a little bit more to handle your company’s marketing and content strategies, you could be hurting your revenue in the long run when you don’t see the results you are expecting. Business Marketing Engine can help you with all of those areas, depending on the positions your business needs to fill.

2. You haven’t established goals for your team

Without establishing clear and concise goals, your team has nothing to work towards. If you have a group of people trying to work together with different perspectives, they’re more likely to get off track. Setting goals will help individuals on your team focus on specific tasks, which can drive positive performance.

Before you set a goal, you need to take into consideration the strengths of your team and communicate it in such a way that it is clear what everyone’s next step is. The goals you set need to be SMART: specific, measurable, attainable, relevant, and time-bound. There needs to be a good balance between a goal being too easy as not to encourage high performance and unattainable, which acts as a demotivator.

Once you set goals, you may find that you have team members who are not on board with working towards those goals. The lack of commitment and support for teamwork from one or two employees can bring the whole team down. Employees don’t need to like teamwork, but it’s still their job to do everything they can to make sure the team is successful. There may be some people who refuse to change or support the team and end up leaving your company. While losing employees doesn’t feel positive, it could give you an opportunity to recruit new team members.

Consider making Business Marketing Engine a new member of your team. You’ll be getting the cream of the crop, and you won’t have to worry about paying a high salary to an employee who could turn out to not fit in with your team or your team’s goals.

Perhaps the problem you’re running into is not being sure what type of goals you need to set for your business to see an improvement in sales. Business Marketing Engine can work with you to help you set goals that, when met, will allow you to see an increase in sales and profit. If you have a team who isn’t working with the same mindset or towards the same things, but the members are being compensated like they’re reaching goals that you haven’t even set for them, your business could fail as a result.

3. You are creating entitlement with high salaries

While you want to reward the hard work of your employees, you don’t want to give them a false sense of entitlement by paying them more than what they are worth. When a company works in sales, you see a natural turnover when people realize they just aren’t cut out for the sales field. However, if they know they are making more than they could elsewhere, unqualified employees will stick around in a position that does not suit them.

There are a few reasons why employees are being paid more than they are worth. They might continue to receive raises even when they don’t meet expectations, when they stay in entry to mid-level positions for too long, or when they are paid too much money to begin with as a result of a weak wage administration policy.

You might think by compensating your employees above the average, they’ll be motivated to work harder and better for you. However, the opposite tends to be true. When your employees have already received the reward, it discourages hard work and decreases their desire to take on more or go the extra mile. Interestingly, as employees become slackers, they become more satisfied with their job and think that they actually are motivated and engaged in their work. According to a study, underachievers think they’re doing a better job than everyone else since they get assigned the basic tasks, experience less stress, and feel more satisfied with their accomplishments.

By overcompensating your team, you potentially create a workforce of slackers who don’t know they aren’t meeting your expectations and think they are putting in 100% at work. This group of workers won’t seek alternative opportunities for advancement, and they won’t be willing to pursue more challenging work that would improve their skills since they don’t have to.

Unfortunately, this lack of development creates a cycle in which the longer an employee remains unmotivated to grow, the less marketable he or she becomes, and the more likely it is that he or she will stay with your company without giving you your money’s worth.

Rather than overpaying employees who don’t deliver results, consider passing their duties onto an experienced and professional team who can deliver results. You put a lot into your business, and it wouldn’t make sense to see it fail just because you are paying employees too much for not doing a good job. With Business Marketing Engine, the results you get far outweigh the cost of the service. Your business’s success depends on sale’s profit, so you should trust the experts to deliver results.

Schedule a free consultation with Business Marketing Engine

Do you feel like you’re team is lacking in certain areas, or you don’t know what goals to set to see results, or you’re just paying employees too much for poor results? If so, contact Business Marketing Engine today for a free consultation. We can discuss your company’s goals and the steps needed to reach them. Regardless if you’re a startup looking to jumpstart your business or an established company not seeing the results you should, Business Marketing Engine can give you the tools you need to increase your sales without having to diminish your revenue by paying out large salaries.

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