NFIB

Hold on to Key Employees Without Breaking the Bank
03/ 28/ 2002

In previous generations, employees who had changed jobs more than two or three times during their career were considered unstable. But times have definitely changed, and now workers who don't move around are often considered unmotivated and complacent. This is bad news for small business owners who rely on employees to help grow their businesses.

For a small company, losing key employees can be a real determent, especially when significant time and resources have been invested in them. In today's Workshop, Jeffrey Moses discusses ways to keep key workers, even if you don't have a fortune to pay them in salary and bonuses.

Sherry Miller-Collins, a veteran executive search professional and president of Miller-Collins Associates, says that traditionally, a definite way to assure employee loyalty was to foster a team atmosphere throughout the company. But she has learned that this approach isn't as powerful as it once was. "Many people today want immediate rewards. They don't think of themselves as staying at one job until they retire, so they jump to any company offering a higher salary," she says.

Small companies that can't offer competitive salaries are in a bind when it comes to retaining top talent, especially during tough financial times. It's always best to offer top performers and "rising stars" financial incentives such as stock options and bonuses or perks such as travel or extra vacation time. But when such financial incentives are not possible for a small company, Miller-Collins suggests providing "hidden perks" that can be used to attract and keep top people.

Here are a few ideas:

1. Put your rising-stars directly in line for management. Some will be willing to stick around if they know they'll be in line for top positions, larger salaries and greater status in the near future.

2. Offer top employees offices, not just cubicles. When a person has an office with a desk, bookshelves and a door that can be closed, it's a real perk, and it may not cost anything extra for the company to provide this to key people.

3. Don't require staff to punch a time clock. Inform your employees about the total number of hours you expect them to keep each day or week, then treat them like professionals and let them arrange their own schedules. As long as they meet or exceed job expectations, it may not matter when they're in the office.

4. Arrange generous commissions for individuals or teams when they perform beyond what would be considered the norm. Many employees will push hard (and become more loyal) when they see the potential to make big financial rewards that are directly commensurate with extra efforts. Companies can afford such commissions because they're based on larger-than-anticipated sales revenue.

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