Planning for the Bus or the Lottery

What’s Your Back-Up Plan for Your Back Office?

Think about your most essential employee, is it the person that completes payroll and billing? Ask yourself, would your business be okay if she got hit by a bus tomorrow? Or, on a less traumatic and more positive note, what if he won the lottery and never wanted to work again?

Whether you think of it as a Contingency Plan or a Succession Plan, there are many reasons why they’re important for all key roles at your company. Today I am writing specifically about weekly payroll and billing personnel at small to midsize companies. If your payroll/billing person doesn’t have a backup or a succession plan, this post is for you. I aim to to equip you with the language necessary to engage key employees and to ask them to help you develop plans for after they leave.

Employees in key positions with no back-up enjoy job security, but carry heavy burdens as well:
• She can never take a vacation longer than 4 days
• He has no one to consult with if the numbers seem “off” or there are concerns
• If a personal emergency arises, there is no one to cover for her
• He is fully responsible

In additional to these personal reasons, think about the business:
• Could you get through the first payroll and billing without her?
• Do you know how to submit the direct deposit files to the bank on time?
• And the EFTPS to the IRS?
• Do you know the nuances of each client’s invoices?

If you answer no to any of the above questions, besides being left in the dark when your key employee leaves, think about the immense negotiating power she has over you.

Approaching a loyal and hard-working employee about his or her succession is a delicate matter that needs to be handled tactfully. Don’t risk threatening job security or making her feel unappreciated or you’ll create a self-fulfilling prophecy. Devising the plan secretly will not work either. Key employees are like parents with eyes in the back of their heads; they know everything about the systems in place at your company and can usually tell immediately when someone is snooping around or something is off. This could also create a self-fulfilling prophesy if the person assumes you have intentions of replacing him.

Something unique about small businesses is that employees, especially the good ones, must take on many roles. Good employees know that as the business grows, new situations arise that require new solutions and processes.

Thinking on your feet and being adaptable is important. The good employees are able to do this because they understand the entire system that makes the company work, and how each change will affect it. Good employees aim to get the job done even if when it’s “not in their job description” because they know that their job description is always changing.

What puts smaller companies at risk is that because we all wear many hats and sometimes fly by the seat of our pants, most tasks are un-documented, unnoticed and even unknown by everyone else but the person doing them. When a long-time employee leaves, those left behind may have no idea what holes there are to fill.

So, the question is: will you be able to survive that first week without your key employee? Then, when you finally find someone to fill those large shoes, how will you train them, when you are unsure of everything that person did? Most likely, you and your co-workers will be finding and trying to fill those holes long after that key employee is gone.

How Not to Do It
Because some employers are afraid to have the succession discussion with key employees, we often have owners calling for the emergency training of a new employee in order to just get through that first payroll. It’s wonderful that they’re asking for training from the source, and I applaud this. However, it leaves a poor impression with the new employee. Nobody likes to be thrown into a high pressure situation like this.

How you Should Do It
As you are well aware, key employees hold a lot of secrets about “the way things are done around here.” You need their buy-in and knowledge to help you devise a successful succession plan. Ask her, “If you won the lottery tomorrow and never wanted to come into work again, how should I proceed? What types of traits should I look for in your replacement?” Or else, “how do you feel we can take some of the burden off of you so that you’re able to go on a longer vacation if you wanted to?”

Let him know that his job is not threatened in any way, but that you want his ideas and input on a plan to put in place for the next generation. Since he’s most close to the process, he probably knows what to do best.

What’s Common?
Depending on size on complexity, most companies have the same person complete the entire payroll and billing for a branch or a segment of branches. This works best due to the nature of staffing payroll and billing and that the hours are equal. After payroll hours are entered, billing is completed with just a click of the mouse (entering hours is the time consuming part.)

So, how can we introduce a second person into the process, for means of having a back-up, without disrupting the process too much? Below are some of my ideas, use these in conjunction with those ideas from the person you’re completing the succession planning for:

1. Schedule two 2-hour training sessions with a Bond consultant to cover the basics of payroll and billing and then complete a mock payroll using our training databases. It’s helpful to be hands-on during the training.
2. Next, have your key employee assist with practical applications and on-going practice. If the back-up is a manager, have him/her complete the staff payroll for 1 week, every other month,
3. Or, cross train: Ask trusted sales people or recruiters to complete the payroll and billing for their customers for 1 week per month

Also, remember, that as the owner, you may also want to have a good idea what to do so that you know how one of the most important functions of your business is completed. Please contact Bond for more information on any of these ideas.

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