If your small business depends on excellent employees, how can you attract and retain them against the resources of larger corporations? In our previous installments of this Leaner and Meaner series, we’ve talked about how the pressures of running a business today require accomplishing more with less. For most of us, that means employees who are very good at what they do, and who are getting better all the time.
Small businesses have a litany of reasons why they are an attractive employment alternative to big organizations. Some are true, but others are merely fantasies that an owner creates to make him- or herself feel better about not being competitive, or not hiring the best.
True Differentiators
An employee in a small business is an individual. Others in the company know who they are, and what their role is in the organization. They don’t have to search a cafeteria at lunch time to see whom they might recognize. They don’t have a job description defined by a number (level II administrative clerk) or shared with dozens of others.
People want to be important. Big businesses can tell people they are important, but reality intrudes when you are sitting in a cube farm that stretches to the horizon. In a small business, every employee really is a key part of the machine. It is an owner’s job to make sure that is understood, both by the employee and by his or her coworkers.
Everyone wants to make a difference. Imagine standing outside of the exit gate from a large businesses employee parking lot. Pretend you have each employee roll down the car window and answer two questions: “Did you do a good job today?” and “How do you know?”
Most will answer “Yes” to the first question, and “I don’t know” to the second. Enthusiasm for a job has to come from more than slogans and team meetings. It should be generated by an understanding of why your job is important, and how it impacts the company as a whole. A small business enjoys a tremendous advantage when communicating that information to every employee.
False Differentiators
The most frequent and least credible claim I hear from small business owners about the advantages of working in their company is “We treat everyone like family.” It is a poor differentiator because it is so true.
Most families are a least somewhat dysfunctional. Which of your employees is uncle Bob, who is only contacted about births and deaths, and happily ignored the rest of the time? Which one is cousin Brittany, whose life disasters provide ongoing grist for the gossip mill? Employees have their own families, and all the baggage that comes with them.
Social interaction, working with people you like and whose company you enjoy, is a key part of company culture. Being sociable and supporting as you would with family, instead of demanding performance, is a clear pathway to mediocrity. Worse, the best workers will leave if they feel they are supporting underperformers.
Competitive Factors
Pay: Big companies can afford to pay more than normal market rates to offset their lack of emotional rewards. That doesn’t mean small companies can pay less than market rates and make it up with culture. You have to be within the range. Check the salary scales on websites dedicated to that purpose, and make sure you keep up with the norm. Employees have real families to support.
Benefits: Health insurance isn’t an option if you want to attract top performers. You may not be able to afford a gilt-edged plan, and you may have to ask for more employee contribution that a big company does. Not offering anything however, is a guaranty that the best prospects will pass you by.
Flexibility: It is laughable that Corporate America is beating the daylights out of small business on the flexibility issues. The only reason a small business can’t compete is because the owner doesn’t want to. Tailoring some customization into schedules or duties is greatly appreciated, and really speaks to how you value an individual.
Growth: Small business usually can’t offer a “career path” of incremental advancement, but that is no reason you can’t offer employees a chance to grow and learn. The current issue of Inc. Magazine quotes Harvard Professor Teresa M. Amabile:
“Of all the things that contribute to a happy workday, the one thing that stands out from my research is making progress on meaningful work.”
Each employee is proportionately more important in a small business. Attracting people who want to be meaningful in their workplace should be a slam-dunk. Having the financial resources to compete on the rest of the issues requires you to be “leaner and meaner.” For that, you need exceptional employees. I admit that it’s a Catch 22, but you can’t build your bottom line with poor performers.
I enjoyed the article, we have worked hard to bring our small business to the size and profitability to retain our top performers. Although we think of ourselves as a family we do cull the family to make room for new family members. Most of the time “family members” who are repeatable passed up will leave on their own: At times We need to let them know their future is not with us. When this happens we need to step back and rebuild the team, though recently we have the new member work for a week at a time with one trainer in their work related areas. after a month we confer with the trainers and see where their strengths are, should any of the managers feel the time investment will not pay off the individual is let go. the longer it takes to make that decision the more difficult it is to let them go–part of the family dilemma I suspect.