Our fantastic Director of Operations, Lori, who runs payroll for us in addition to doing oh-so-many other things, recently took a short leave of absence (she’s fine, thanks for asking!). In preparing for that, the first thing we went over is how to make sure that every payroll that we needed to process while she was out would get processed without a hitch.
See, I’ve adopted a lot of axioms over what has become an almost 25-year career (holy what?!). And while all of them matter – I stand behind being entertaining and likable, the idea that there is no medium risk, only trafficking in no-brainers, and not skimping on the swag, for example – the number one rule of business has got to be don’t eff with payroll.
What does that mean? It means to always pay people the amount they expect at the exact time they expect it. Because doing anything other than that risks a lot of unhappiness and upheaval.
I’ve written in the past that certainty is expensive, and one reason certainty is expensive is because certainty is also valuable (remember that always growing at a low growth rate is not a bear case!). And for people, payroll is something they plan their lives around. They schedule bill payments, special occasions, trips, Christmas shopping, etc. all around when they expect wages to hit their bank accounts. Mess with that at all and you’ve created real-life confusion for which you may never be forgiven.
A quick anecdote…
We had a portfolio company recently that for strategic reasons transitioned from its own warehouse to a 3PL. One consequence was a reduction in onsite warehouse staff. The company did its best to treat everyone in that situation well and actually received a note from one of the employees in question who wrote to thank the CEO for the experience and remarked that one of the reasons he enjoyed it so much was because his team “was never made to feel like employees.”
This is great because it’s important to build company culture around more than a transactional labor-for-dollars relationship. People want more than just money out of a job. They want relationships, purpose, development, opportunity, responsibility, appreciation, and to feel like they are part of a winning team.
But all of that sits on top of payroll.
Eff with payroll and it all gets on shaky ground.
– Tim
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