The luring away of top talent may hurt any company, but small businesses may be especially vulnerable. After investing time and energy into training high-performing employees and coming to rely on their services, having them snatched away may be a devastating blow to the bottom line.
Unfortunately, poaching may be on the increase, believes Dan Prosser, author of Thirteeners—Why Only 13 Percent of Companies Successfully Execute Their Strategy—and How Yours Can Be One of Them. “The competition for employees in America, despite higher than reported actual unemployment numbers, is about to get worse, not better, and the companies who will win this ‘war for talent’ will be the companies who ascribe to the largely unrecognized relational values of the new world of work.”
For the small-business owner, it may not be feasible or practical to launch into a bidding war over an employee. And the reasons employees leave may be more complicated than money.
“If you try to address the symptom as most companies do by piling on more benefits and perks, you simply delay for a short time the devastating impact of the real problem,” Prosser says. “Engagement is what will allow companies to cement relationships with their most valuable employees, and it’s what most employees desire.”
—Bonnie Harvey, co-founder, Barefoot Wine
Attracting and keeping employees can be a multifaceted challenge. Offer the following perks to your workforce, and employees may be less likely to leave for your competitors.
1. Provide Responsibility
“Give your employees permission to be creative in solving problems and even make mistakes,” Harvey says. “Share the company’s challenges with them and ask for their ideas. Then when they solve a problem, reduce costs or increase sales, acknowledge them publicly. The team will have more respect for them and want the same kind of acknowledgement themselves.”
2. Create a Clear Career Path
Identify the trajectory of each key job. “Employees worth keeping are always looking for new responsibility and want to know that there are next steps and that they are not in dead-end jobs,” Harvey says. “Make them part of a growing company where they see that as the company expands, insiders have the advantage in getting the top jobs. They won’t be so eager to jump ship if they can see what is waiting for them.”
3. Pay for Performance
Don’t pay everyone the same no matter how they perform or how well the company does, Houlihan advises. When you pay your people right, non-performers can’t afford to stay and performers can’t afford to leave. Recognizing performers with salary differentials can send the message they don’t have to leave to get what they deserve.
4. Institute “Stay” Bonuses
Match some portion of key employee salaries in an account that is at risk if they leave the company before a set period of time, Harvey suggests. “As the time approaches, offer to increase the contribution for a new extended term of tenure. This can be done with notes, stock options, cash or contributions to tax deferred retirement funds. The investment will be a fraction of the cost of losing a key player.”
5. Provide Flex Hours
Don’t let poachers lure people away with the flexible hours they require for childcare and personal needs. Wherever possible, consider using technology to allow remote work.
6. Focus on Work-Life Balance
“A small business can differentiate itself by creating a balanced life for employees,” says Josh Davis, author of Two Awesome Hours: Science-Based Strategies to Harness Your Best Time and Get Your Most Important Work Done. He notes that while a balanced work life does mean less work, it can actually lead to higher productivity.
As part of a balanced life, you could offer employees time off based on how long they’ve been with the company. Consider extending sabbaticals to key employees. Adequate time off can keep employees happy and encourage them to stay put.
7. Stand for Something
In today’s world of increasing transparency, it may not be enough to have the best products or services. “Employees want to be proud of their company and what it stands for in the broader community,” Houlihan says. “Give them the feeling that they are making a difference, and they will be more likely to stay for social reasons.”
If you do lose an employee to poaching, you might treat the event as a learning experience. Determine what the other company offered in money, benefits and perks, and ask the departing employee why those things are preferable to what you offer. This may enable you to take proactive measures to reduce the likelihood of a reoccurrence.
It may also be best to bow out gracefully, advises Linda Losey, owner of the Bloomery Plantation Distillery. “Wish the employee well, and keep the door open. The possibility of paths crossing in many industries is very real. It’s all about relationships and preserving your reputation.”
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A version of this article was originally published on June 18, 2015.
