Attracting & Retaining Talent as a Startup – Part Two
Guest contributor: Pauline James
This is a two-part article; jump back to part one.
Last week Pauline James covered honesty with potential employees, competing with large companies and knowing what you’re looking for to attract startup talent. This week she covers how to retain startup talent.
But just after they are trained, they leave for a larger company with bigger pockets!
You invest your heart and soul developing an employee, so how do you retain startup talent? Just when they are a key contributor, they announce they have accepted an offer with a larger player. Ouch! You cannot eradicate this risk, but there are a few ways to mitigate it.
Encourage employees to be open about their future goals, whether they are in line with your organization or not. There may be internal opportunities they are not aware of, or an opportunity to leverage their interests to help grow your business. When you are interested in employees as individuals, they are more committed. If they decide to leave, they are more likely to give their full effort while with you, be a brand ambassador, and even help you find their replacement.
Secondly, establish a shorter cycle to review your team’s compensation. Perhaps larger companies can afford to look at this once a year. For you, the impact of losing someone fully trained, with the costs of recruiting, training, and lost productivity is substantial. If your employees are quickly gaining marketable skills, ensure your review cycle matches this. Compare their current compensation to the value their new skill set holds in the market. What would the cost and impact be if you lost them?
What do I need to offer to compete with benefits?
The ‘good news’ is that companies of every size struggle to offer competitive benefits plans, given the escalating costs of health care.
Aviva Abraham, B.S. Accounting, CPA, Creative Financial Planning Group specializes in small business and advises,
“It is not all that expensive to set up a group plan, but costs can skyrocket if not well managed. You do not want to be in a situation where you implement benefits and then take them away. I suggest offering a basic plan you can build on over time. Many provide what is called a Health Spending Account (HSA), which provides a set amount of money for health benefits. Employees then have the flexibility to use how they wish on drug, dental, registered therapists and more.
While employees do not demand it, I strongly advise offering ‘catastrophic coverage’. This inexpensive coverage protects employees and their families when a serious illness arises. Employees cannot predict when they will be impacted by a serious illness. As a small business, every individual plays a critical role. Failing to provide this protection, puts them and the organization at risk.”
Lynne Moore, CPB, LAM Consulting Inc, has seen many examples of small employers becoming creative to contain costs and retain startup talent, while providing appealing benefits. Typically, they share the costs of medical and dental premiums with employees. As well as consider additional perks that would be appreciated by their team. This could range from providing free lunches, gym memberships to having someone come on site to detail their cars. You are only limited by your imagination. You would need to confer with your accountant on which employee benefits are taxable for them, but all will be considered business expenses and tax deductible for you.
Lynne acknowledges that it can be harder to compete on vacation, but when you are flexible with employees they tend not to feel they need as much. This includes allowing employees to work from home, whenever possible or children are ill. Or providing ‘summer hours’. When such flexibility is offered, you may need to monitor employees are taking their vacation to rejuvenate and meet your minimum obligations under law.
Offering a great work environment.
If the reality of the working environment does not live up to the courtship phase, employees will leave and leave unhappy. They may then leverage their network and social media to prevent others from making the same mistake.
Carlos Paz-Soldan, a serial Tech Entrepreneur, has found culture to be critically important to retain startup talent. He offers additional ‘perks’ which support the learning and collaborative culture he is committed to fostering. This includes a shared e-book account, attendance at conferences, membership fees, and taking employee suggestions on leading technology to test in the workplace.
“Our goal is to build a workplace where employees are motivated, not mandated, to investigate trends in our industry. We want an environment that is open to ideas and suggestions on how we can improve. No one person has the insight to see everything coming that can impact your business. There are enormous benefits in having a team that is invested in and helps influence your future.”
This brings us back to the “Importance of Culture from Day One, Employee One”, from our earlier post.
Please feel free to share what you have found to be effective tactics for attracting and retaining talent at [email protected] If you are willing to share, we will include these ideas in a future update!
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About Pauline James:
Pauline has held a number of senior positions and led Employee Relations and Labour Relations in the Canadian market with large national organizations. Over her career she has also held roles in Training & Development, as an HR Generalist, and in Operations.
She has supported small independent units and large complex divisions in identifying barriers to employee engagement and performance. This has resulted in an improved employee experience, while also reducing risk and costs. Having worked closely with her clients and as a leader herself, she is sensitive to the genuine desire of leaders to provide a great work environment while meeting business objectives. Pauline is committed to working with her clients to help them become more effective, respecting their business’ unique challenges.
Pauline has a track record of working with Operations and HR divisions to build effective and sustainable programs, tailored to their needs. This includes support from the design through to implementation, including leader training and employee communications. What is unique about her approach is that she is committed to teaching and helping leaders to become independent as opposed to promoting reliance on an ‘expert’.