In difficult economic times, challenges and changes come at the small business owner rapid-fire. If it’s not a steep, unexpected price hike from a materials vendor you’ve depended on, it’s a stringent new industry regulation, or losing out on a project bid to a hungry new competitor. Thank goodness for your employees, you say, especially your key people. At least you can count on them. They wouldn’t think of leaving the company – especially in a tough economy like this one.
Or would they? It’s easy to fall into complacency about your key employees in an environment of high unemployment. If a key person leaves today, there ought to be ten just like him sending in resumes tomorrow, right? Well, maybe. But even if that’s the case, it’s important to remember the costs of starting over with somebody new. Loss of productivity from that position while the new hire is oriented and trained; the time you personally spend bringing the new hire along versus doing something else with your valuable time; the administrative costs both of terminating the old employee and hiring the new one – these are dollars off of your bottom line.
If you haven’t already done it, identify your key employees – the ones whose loss would deal a major blow to your operation. Then, keep these points in mind as you evaluate the relationship between them and your company, both from your point view and from theirs:
It’s not always about the money. Yes, your people need to earn a living. But when deciding whether to change jobs, compensation can rank as low as third in the pecking order for employees. Often, feeling unrecognized for their efforts, or seeing little or no opportunity for advancement at the company, are reasons cited by workers for quitting a job.
Compensate competitively. That said, you can’t ignore what your industry typically pays a worker of the kind you want to retain. Keep an eye on internet or newspaper want ads, talk to peers in markets outside of yours, or use online resources like salary.com to know the going rates. You don’t have to be the top payer, but you don’t want to be significantly below average, either.
Open your doors, and your ears. Talk to your employees, regularly and honestly. Your key employees can be fantastic sources of information about facets of your operation that you don’t – and can’t – see every day. Listen to their concerns and opinions, and give credit when it’s due someone for suggesting an effective new procedure or pointing out a management mistake. This kind of “attaboy” can go a long way to ease the pain when there’s no money for pay raises.
The little things are important. Small incentives can make a big statement to a key employee, and they don’t have to break the bank. Set goals, and reward your people for reaching them. By and large, people come to work wanting to do their jobs well. Inexpensive little perks, like gift cards, a few hours or half a day off with pay, or even taking an employee out to dinner, all express appreciation for hard work and loyalty.
Don’t take your key people for granted, even in an “employer’s market”, when there are qualified people out of work and it seems you hold all the cards. Losing somebody you count on because you failed to see their dissatisfaction can be painful, and can cost your business for a surprisingly long time.