Retaining Key Small Business EmployeesRon Stone
June 1, 2009 — 2,440 views
Many small businesses find it difficult to hire top quality talent as well as retain them. There are a number of areas where they feel they are at a disadvantage compared to large companies.
Among these are: 1) Less area for career growth, 2) Pay, 3) Benefits and 4) A less structured environment. I would like to address each of these perceived shortcomings and how they can be turned into a positive for both attracting and retaining top-notch talent.
1. Lack of career growth opportunities - A smaller firm can have and show opportunities for career growth. While they do have a flatter organization, opportunities exist for employees to learn other skills when they help you and each other with all the tasks and responsibilities that must be fulfilled. For example, they may help with advertising copy but be primarily a salesperson. They can actively help with inventory. Also a small business can divide up itself by either business units or by disciplines. Either way, if employees have clearly defined responsibilities the employee can grow by learning and having responsibility for various areas. In a basic example, it could be like earning Scout badges for the various areas of responsibility. Promoting how someone that grows within your organization will be acquiring broader and deeper experiences that look great on a resume can be a real positive to many people desiring to grow. Many employees who work for large organizations do one job for their entire corporate career. They hit a pay and experience ceiling early and never grow beyond that point. This is something a small business owner should point out.
2. Compensation - While a person's pay is important, I believe its ability to retain employees is overrated. The small business owner would want to not be too far from what a larger firm might pay but more importantly, you want to reward employees with recognition in numerous ways. Some might include, bonuses based on quantifiable results, additional time off, special perks like going to ball games and in particular, recognition of performance for others in the organization to see. This not only helps with the rising stars but it builds healthy competition within the business.
3. Benefits - While individual employee benefits can include a lot of elements, the most common benefit that is of concern to current and potential employees is business health insurance. What many small businesses don't think about is that with careful front end planning, setup and management, the expense of small business health insurance can be very reasonable. A couple of other ways to keep this cost under control is employee health incentives along with employee contributions. I have several trucking companies that cover all their truck driver health insurance through employee contributions. Even though the drivers are paying all the costs of their truck driver health insurance, their individual health insurance costs are considerably lower than they could get on their own. Such an employer plan also allows individuals to be covered with health insurance that could never be covered economically on an individual basis.
4. A leaner business environment - Rather than allow a typically less structured setup for a small firm to be a negative, play this up as a good thing. Here are two ways to present a less structured environment to prospective employees, a) An environment that allows freedom to take on projects and learn new skills that would never happen in a larger business and b) Wearing different discipline hats can position someone better for the owner's job or to run their own company eventually.
When a small business owner takes all of these potential negatives and turns them into positives, they end up, not only with better employee acquisition and retention, but will also have a more successful business. This is all good for you and your business.
About the Author
Ron Stone is a financial and insurance professional. Among his companies is a business health insurance agency specializing in trucking company health insurance. Learn more at Truck Driver Health Insurance