Recruiting and retaining talent to enable the growth of a business is as the major headache for owner-managers, says David Molian, Visiting Fellow at Cranfield School of Management.
In the fifteen years that I was involved with the Business Growth Programme at Cranfield, the biggest issue that participants constantly brought to the table was people. Year in, year out, recruiting and retaining the talent that would enable them to grow the business came to the fore as the major headache for owner-managers.
Working for an entrepreneurial business is a double-sided coin. On the plus side, there’s excitement. This tends to be a fast-moving environment in which a single event, such as winning a major client, can transform the company’s fortunes overnight. People can also progress quickly and frequently gain exposure to the different elements of running a business faster than they could in a large corporation. In a well-run business ability and hard graft are recognised and rewarded without the need to become immersed in the dark arts of corporate politics.
On the downside, however, very few smaller businesses can offer the relative stability and fringe benefits that are the norm in a big company. There is little planned career progression and rates of pay are generally lower. The loss of a single customer can put the firm’s future in jeopardy. Many would argue that the trading environment is inherently riskier and more uncertain. The success of the business is perceived as dependant on the judgment and whims of one individual, not on the checks and balances of systems, processes and corporate governance.
One response to this characterisation is to conclude that different types of business attract different individuals. To solve the problem, the owner-manager just needs to fish in a particular pond, and to accentuate all the positive aspects of their business described above. Perhaps, if you’ve concluded that you’ve taken the business as far as you want – or as far as it can go. But if there’s still fire in the belly and a desire to grow, you’re ruling out exactly the kind of people who can help you achieve your aspirations.
If you think new recruits from a more diverse background will enrich your business and accelerate its development, here are two tips I’d like to share with you: lessons from observing the successful strategies of businesses I’ve worked closely with over the years.
External endorsement: It’s one thing to say you’re a great business to work for. It’s quite another to have that claim validated by a respected third party. Companies that are going places do not hesitate to put themselves forward for recognition. Hotel Chocolat’s latest achievement was to triumph as a category winner in the 2016 National Business Awards. GoApe not only won their category in the 2015 National Business Awards, but featured in the Sunday Times 100 Best Companies to Work For.
Accreditation: In the business-to-business sector, a company that I’ve also advised, Bidwriting.com, has consistently achieved gold status through Investors in People, proudly displaying the plaque beside their front entrance. The co-founders say that going through the annual process of qualifying has not only helped attract staff with great CVs, it’s also actively helped the business improve continuously.
Do not underestimate the effort involved in taking part in awards or accreditation schemes, but the impact can be enormous. Your business will stand out from the pack as different and special.
And herewith two more tips for holding on to those talented people once you’ve recruited them, again gleaned from observing at first-hand business success stories:
Create careers, not just jobs: Good, ambitious people aspire to more than a job. They want to know where they’re going, where the business is going and how they fit into that future. They’re looking for career progression. Too often owner-managers persist in keeping their plans to themselves and sharing as little as possible. If you won’t commit to a culture of openness and transparency, don’t be surprised if the people you’d like to have on your team are reluctant to commit to you.
Little and often beats big and infrequent: Finally, small but regular rewards seem to have a greater effect on morale than the annual bonus. Lara Morgan, founder of Pacific Direct, created a company culture of long hours and relentless graft, and made no apology for doing so. Perhaps surprisingly, staff retention levels were way above the industry average. But every month her staff received a tangible reward in their pay packets or on their desks and in 2005, when profits hit the £1 mn mark, the entire company was taken on a week-long trip to Barbados.
And sometimes, just remembering to say thank you is more than enough.
David Molian is a Visiting Fellow at Cranfield School of Management and former Director of Cranfield’s renowned Business Growth Programme