Updated: Dec 13, 2019
It’s no secret it’s extremely difficult to find and hire top talent, especially if you are a small company. However, it is often times even more difficult to retain these great employees once you’ve found them. Smaller companies have the same challenges every other business has: competition from other companies, better salaries, benefits, positions, etc. Unfortunately, they also face additional challenges due to the lack of resources, and frankly, their size.
So how do you keep great employees from leaving when you don’t have the big bucks like the larger companies or companies?
Don’t get me wrong, sometimes, there are those amazing opportunities that come around that you wouldn’t even turn down. When those come around, there is little you can do to keep that employee from leaving. However, aside from these opportunities, leaders have the ability to retain their top employees if they focus on the following key steps.
1. Opportunity for growth: Growth means different things for different people. Find out what’s important to that employee. For some, it could be professional development, such as, paying for their professional designation classes or other certifications. For others, it could be learning about another area of the business, or leadership classes. Find out what’s important to that person, and identify ways to provide that growth.
2. Advancement: Advancement is often difficult at a smaller company. After all, there are only so many people that work there. There is no corporate ladder. However, advancement can come in different forms. It can be traditional things like additional responsibilities like management, larger accounts, or better titles with more pay. But it’s important to think about other things that can be important to some employees they can “advance” into. This can be things like condensed work weeks and flexible schedules.
One company I knew had a promotion path for “executive account managers” that provided essentially the same functions, but came with the perk of additional bonuses, profit sharing and a four-day work week.
3. Money: Money is touchy subject for most individuals. While money should not be the main reason why someone should accept a job, it can often be why someone would leave a company.
First rule of money is not to mess with an employee’s money. Meaning, don’t play around with their comp plan or make the comp plan vague. This is a key reason why a great employee would leave your Company. An acquaintance of mine told me that she left her last company because she was told she was making too much money. She was a top sales rep for her company and fully took advantage of the comp plan. After she earned it, her boss told her the company was not going to pay her what she earned because she made too much. In fact, she earned more than her boss and her boss’s boss. However, do these facts matter? She exceeded expectations, brought the company enormous revenue, yet they now want to change her pay out. Because she “made too much?” After some legal threats, she was paid what she earned, but she soon left the company. Wouldn’t you?
Also, don’t make a comp plan vague to interpretation. Another friend of mine achieved 100% of his plan, but fell 25% short of what he was promised as annual earnings. When he approached his manager, he told my friend that the dollar figure that was on the offer letter was what he can earn “over time” like a year and a half to two years if he hit 100% of goal. Again, this company could have done this intentionally or unintentionally, but it yielded the same result. They lost a top producing salesperson because they “messed” with his money.
As a smaller company, you may not have the resources larger companies have, but like the previous two points, you can augment the compensation plan by providing more flexibility or time off. You can even consider offering equity to top producing or key employees.
Take a page from the most successful startups. In their early days, these startups could not afford to offer great employees market rate. However, they did offer an attractive equity plan, so these employees can potentially earn significantly more in the future. We’ve all heard stories about early employees at Google and Facebook and what their equity was worth.
While you may not aim to become a Facebook, equity is meaningful for key employees. You can structure equity plans with vesting cliffs and periods in case of a separation.
4. Relationship: Similar to money, relationship may not be the reason why someone accepts a job, but is often the reason why an employee would leave. Bad management is often the reason why great employees walk out the door. Here are some key things to consider.
· Build genuine interest in the employee’s goals and values. This doesn’t mean you have to be best friends with everyone. It simply means you should get to know who they are and what’s important to them.
I’ve worked for “transactional” managers that only engaged with me during meetings and required 1 on 1s. These managers showed no interest or empathy towards me personally nor my goals. On the flip side, I worked for great leaders that built genuine relationships with me. They asked about my goals and aspirations, what was important to me as a person and professional. They focused on helping me achieve them and seemed genuinely interested in my career and personal progression. Guess who I was most loyal too?
· 1 on 1 – Establish regular weekly or bi-weekly 1 on 1s with your direct reports. Remember, the 1 on 1 is about them and their goals/issues. 1 on 1s should not be about numbers and daily issues. Those can be addressed during the week.
· Recognition – Ensure you recognize great employees. It doesn’t always have to formal, but sometimes that helps. Everyone views recognition differently and of course you have to consider your own budget. You have to adapt this to your own situation and team. Here are some ways to recognize great employees:
Trophies and awards
Thank you cards
Gift certificates/money/other incentives/
Paid time off
Recognition at a company event or meeting
Shout out on social media
A simple and sincere spoken “thank you”
Lunch or outings
Don’t forget anniversaries and birthdays
5. Inclusion: Companies large and small often times struggle with this area. This is where you hear the term “disconnected” often from employees. Employees feel disconnected from their companies because they don’t feel like they are part of something greater, but just a part of the “machine.”
Inclusion doesn’t mean that you have to include employees with every decision you make. It does mean that you should listen and solicit ideas from your employees. Great ideas can come from anywhere.
Inclusion also means that you should share with them the Company’s vision, goals, challenges, successes, and disappointments. Great employees want to celebrate victories with you, but they also want to share in your disappointments and failures. They also want to know what the future may look like and how they can be a part of it.
6. Expectations: The worst thing founders and leaders can do is to not set expectations. More importantly, don’t inspect expectations consistently. Employees often times feel that they were “chewed out for no reason,” or that they had no idea their boss was expecting a certain result. Set clear expectations for results, behaviors and other critical matters. Inspect these expectations consistently so no one is very surprised they are off track.
7. Culture: What all the above lead to is culture. What kind of culture does your Company have? More importantly, what kind of company culture do you want? The six points above are some of the critical elements to establishing a good company culture. The most important thing to remember is that it starts with you.
It all starts with you creating the right culture that you want from your Company. Recruiting the type of employees that want this culture and will thrive in it. Culture can change with each additional hire so keep this in mind as you scale or replace employees.
If you manage to establish the 7 points above, you just might have a fighting chance when that unbelievable opportunity comes knowing on you employee’s door. Worst-case scenario, you’ve created a great place where your employees enjoy working at and others will want to join.