Small to medium businesses often have it pretty tough when it comes to hiring, engaging, and retaining their employees. Large organisations and fast-growing, capital-infused startups can often outshine SMBs with their big budgets, epic offices, and big brand appeal.
According to a survey by Robert Half, 60% of small business owners and management said that finding skilled workers was their company’s greatest challenge. When they do manage to overcome this hurdle, there is still the ongoing matter of engaging and developing these employees, with 19% of survey respondents citing maintaining employee morale and productivity as their greatest challenge.
But budgets and offices aren’t everything. After all, we are talking about the very human needs and wants of employees here; employees who value and crave far more than a paycheck or ping-pong table. So luckily, there are plenty of things that SMBs can do to avoid the brain drain.
With less bureaucracy and fewer checks and balances, stuff naturally gets done faster at small businesses. Take advantage of this fact during your hiring process. Respond quickly; interview quickly; and make offers quickly. Nothing woos candidates more than showing your unequivocal interest and confidence in them – while beating everyone else to the punch.
This same philosophy goes for retaining employees. When an employee shows strong promise and loyalty, reciprocate by offering them more responsibility, more opportunities, and heaven forbid – more money. These raises don’t need to go through four or five channels; just get it done. Estimates show replacing an existing salaried employee costs approximately 1.5x to 3x annual salary – so don’t let them go.
Make it personal
The CEO of General Electric can’t develop personal relationships with his employees – but yours can. Make relationships at your organisation more personal. Ensure that the CEO knows his employees and that each employee feels like an integral part of the machine. Also ensure that each candidate during a hiring process feels like a person and not a number; because big companies inevitably struggle here. Show employees and candidates you care with personal emails and feedback, fun events, and more intimate team experiences. At the big machines – no matter how hard the management and culture teams try – most people are cogs.
Big companies are inherently full of red-tape and layers of hierarchy. This means that employees often feel stifled and limited in their scope. Small business on the other hand, naturally have flatter structures. Leverage this and empower your employees to take initiative and make decisions. A study of 320 small businesses showed that companies that grant employees choice in how to do their work grew at four times the rate and had one-third the turnover vs. control-oriented firms.
You’d be surprised how many individuals desire more responsibility and more fulfillment from their jobs. What’s the worst that can happen?
Too many SMBs overlook learning and development channels because they perceive them as being out of reach, with larger companies spending an average of over $1,200 annually per employee. Well, one of the most traditional and proven methods of L&D and succession planning is a far more efficient approach, and is always right under your nose: mentoring.
Mentoring leverages the capital that you have already invested in and payed for: your human capital. And it helps on a number of levels. It helps engage and retain current employees (ensuring less fall out of a leaky funnel); helps onboard and develop new employees (ensuring more of your employees become effective); and improves internal knowledge share and company culture (ensuring that everyone is happier and more productive). All of these things lead to less time and money spent on hiring and ‘training’ – and more time spent moving forward.
Large organisations don’t care as much about who they hire and retain as you do. How can they? When they are hiring their 5,000th employee – and you are hiring your 60th.
Your problem is that it’s hard to care, because caring means investing more of your limited time and resources into an already resource intensive process. But the solutions above are resourceful in nature, require a highly possible and mostly cognitive shift in your mentality, and make avoiding the SMB brain drain not only possible – but likely.
Play to your strengths. David beat Goliath.
About the author
Lance Hodgson is the marketing manager at Mentorloop, the mentoring software platform that helps organisations run better mentoring programs. Lance has helped scale start-ups and established corporations in both the U.S. and Australia – and is currently enjoying making mentoring more mainstream.