The Shocking Correlation between Equipment Financing and Employee Turnover
In a recent independent survey of 2412 Business Owners (less than $30,000,000 in revenue):
- Companies that pay cash for equipment keep equipment longer
- Companies that pay cash for equipment have higher maintenance expenses
- Companies that pay cash for equipment have more equipment downtime
- Companies that pay cash for equipment have more employee turnover
Think about it: the longer you keep equipment the higher the maintenance expense. Higher maintenance expenses typically mean that there are downtime expenses because of equipment failure. And while these events are occurring, small businesses are perhaps missing the single biggest negative impact.
The most damaging by-product of the cash strategy is not a rental expense, maintenance, or even cash flow spikes, it’s employee turnover. Finding good employees seems to be getting harder and the cost of losing one is extremely expensive and disruptive to a small business. When your company is using older technology and equipment it leads to issues of downtime and inefficient performance, employees leave.
82% of 7,226 small business equipment operators (from entry-level to advanced in industries ranging from construction to IT) said current equipment was a major factor in their job satisfaction.
No wonder the same research revealed that companies that paid cash reported higher turnover among equipment operators. Financing allows companies to stay on the cutting edge of technology. The simple monthly payment for a period of time, only to replace the equipment at the end of the finance term with the newest model and/or technology. Financing executed the right way becomes a program to ensure your company and your employees have the tools to do the job.
And don’t sleep on the small stuff. Many times business owners wouldn’t think of not financing the $100,000 purchase but are paying cash for the next 3 laptops or the used trailer. These items are often the most impactful to the employee experience and from a financial point of view can add up to be significant monies.
The right finance partner can help. American Financial Partners makes commercial equipment more affordable for businesses like yours. Call us today to find out more.