2021 Business Benchmarks: Cost of doing business
Cost of Doing Business: Middle of the pack
James Sieben, President, Nova-Tech Engineering
Some costs of doing business are unavoidable, like investments in new technologies or workforce. Businesses do what they can to find efficiencies and remain flexible to meet their goals and weather economic uncertainty.
Nova-Tech Engineering has a unique business model that focuses on the individual, for purposes of retention and growth. It has created a culture where employees don’t report to a traditional manager. They collaborate in groups to focus on the output of their work – both individually, and shared. “Building a flat corporate structure is important to our growth,” says James Sieben, President of Nova-Tech.
Nova-Tech is a robotics-focused engineering firm that serves the agricultural industry. Their equipment operates in 59 countries around the world, gaining only 5% revenue from the state of Minnesota. But a majority of their 250 employees live and work here. “We spend an enormous amount on people and culture,” he continues. Building the company in this structure was complex. Most employees come to the business with an idea of traditional corporate hierarchy, and wonder how they would fit in. But today, they boast huge employee retention rates and attribute that to their focus on the individual employee, their strengths and their purpose for work.
In addition to reducing costs by retaining employees, Nova-Tech brought down health care costs by self-insuring. This too, takes time, helping employees understand they can make a difference in the cost of insurance. But they are already seeing the results, in dollars and cents. “Last year we only saw a slight increase, compared to double-digit increases in the industry.”
Creating a unique business culture can benefit the health of the business as well as the bottom line of that business.
“Everybody needs a purpose for work,” Sieben says. Nova-Tech proves this by bringing down their costs and creating a place where employees want to build their careers.
Where does Minnesota rank?
The cost of doing business encompasses elements of affordability to both employers and employees. Several of
these elements have improved in Minnesota in recent years, including health care and the cost of living. Since the
post-pandemic workforce could see remote options as creating opportunities to work anywhere, costs to employees in Minnesota will be increasingly important, such as cost of living.